Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

ALLIED IRISH BANKS BILL

HENRY JOHNSON, SONS & CO., LIMITED BILL

UNIVERSITY COLLEGE LONDON BILL

Read a Second time, and referred to the Examiners of Petitions for Private Bills.

EDINBURGH ASSAY OFFICE BILL

Considered; to be read the Third time.

Oral Answers to Questions — ENVIRONMENT

Drinking Water

Mr. Hinchliffe: To ask the Secretary of State for the Environment what steps he takes to ensure the independent monitoring of the quality of drinking water. [10368]

The Secretary of State for the Environment (Mr. John Gummer): Before privatisation, there were no proper standards for drinking water and no effective monitoring. Since privatisation, strict monitoring by the drinking water inspectorate has been introduced and standards have risen every year since 1991.

Mr. Hinchliffe: The Secretary of State will probably be aware of the recent red alert on drinking water in the Wakefield area as a result of the discovery of cryptosporidium in drinking water supplies. Given the complete lack of public confidence in the privatised utilities, especially Yorkshire Water, will the Secretary of State ensure that, when there are red alert procedures in future, they automatically trigger an immediate objective evaluation and monitoring of the safety of that drinking water? Why are the Government unable to offer a definition of safe or unsafe levels of cryptosporidium in drinking water?

Mr. Gummer: Before privatisation, there would have been no testing, there would have been no way of finding out about cryptosporidium and companies were not required to report it. Companies are now required to report

it at once. The drinking water inspectorate runs independent tests and deals with the matter independently—another advantage of privatisation.

Sir Jim Spicer: Do we not have the finest drinking water in the world? Is it not acknowledged that 99.3 per cent. of all the tests are passed with flying colours, and is it not disgraceful that, time and again, we find that very high quality being rubbished by Opposition Members?

Mr. Gummer: I do not know of any other country in the world that has such good data and so universal a system of monitoring drinking water. In the whole of Europe, this is the only country to publish properly audited data and we believe—we cannot say for sure because other countries do not publish properly audited data—that we are among the best, if not the best, in Europe.

Mrs. Helen Jackson: In Yorkshire, people may consider the Secretary of State's answers to have been complacent. Is he aware that the public health authorities in Sheffield and in the other parts of Yorkshire feel that the cryptosporidium leaks that have been acknowledged in the Elvington and Barmby Moor sewage treatment plants are serious? Is he further aware that they affect 20 per cent. of all Yorkshire Water drinking supplies? Does he realise that there is a possibility that those increased levels of cryptosporidium may be linked to the reduced flow through the waste water system because of the cuts and the drought?

Mr. Gummer: I agree that this is a serious matter and, in that view, we are unlike any other country in Europe. No one except the United States treats the matter with the same seriousness as we do. We are the only country to have a system of monitoring and of dealing with the problems as they occur. It undermines public confidence to suggest other than that we have the safest drinking water in the world and the best services to ensure that it remains that way.

Local Authority Services

Mr. Robert G. Hughes: >: To ask the Secretary of State for the Environment what plans he has to meet representatives of Unison to discuss the provision of local authority services. [10369]

The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): None.

Mr. Hughes: My hon. Friend's reply is somewhat disappointing. Will he arrange a meeting with representatives of Unison, and use that as an opportunity to explain to them that compulsory competitive tendering has saved enormous amounts of taxpayers' money and has led to the improvement of many services—benefits that are now widely recognised across the political divide? Will he impress upon them the importance of removing their armlock from Labour party policy so that Labour drops its stupid opposition to CCT, which proves once again that it cares for those who pay for the Labour party and not for those who pay for local services?

Mr. Curry: I am afraid that my hon. Friend is seriously wrong in one of his statements: that view is not shared


across the political divide because the Labour party quite clearly does not share it. Labour is hostile to competition because it is funded by Unison and, if Labour ever came to power, we know that the council tax payer would finance Unison.

Mr. Dobson: Does the Minister recognise that we acknowledge that we meet with trade unions? In the past few weeks, I have met the ex-Tory Member of the European Parliament, whom the Secretary of State appointed to chair the Countryside Commission, people from the City of London and from London First, and the people whom the Secretary of State has appointed to the Audit Commission and to the Local Government Commission. While we are on the subject of ministerial meetings—this is the Department that managed to lose £300 million in taxpayers' money through the privatisation of the Property Services Agency—will the Minister tell us whom Ministers and officials met when they organised that transaction? Did they meet any ex-Tory Ministers when they were deciding to sell off that industry?

Mr. Curry: I am very reassured to learn that the hon. Gentleman has such a busy social diary. However, he will know that his remarks have nothing whatever to do with the question. We sold that company because it was better in the private sector than in the public sector. The employees have benefited from that sale, and it has become an efficient company.
The hon. Gentleman persists in believing that such bodies are run better by the state than in the private sector. There is no evidence to support that view—and I am not even sure that his leader believes it.

Mr. Butterfill: Did my hon. Friend see the report in an edition of The Spectator from last year in which Mr. Leo McKinstry—who was the aide to the hon. Member for Peckham (Ms Harman) at the last general election—said that the unions still have a great deal of influence in Labour town halls? Is it not true that they are more interested in representing the producers than the consumers in our society?

Mr. Curry: One of the encouraging signs in recent years is the way in which a great many people in local government have embraced the partnership between the public and the private sectors. However, I am not sure to what extent that is followed by the Labour party at Westminster. It seems wedded absolutely to the idea of trade union power and the trade unions finance many of its activities. If my hon. Friend wants to discover what Labour is really like in government, I suggest that he makes some calls on a few local authorities, and he will find out in a very short time. Perhaps he should start with somewhere like Hackney.

City Pride Initiative

Mr. Bill Michie: To ask the Secretary of State for the Environment what plans he has to extend the city pride initiative to more cities. [10370]

The Minister for Construction, Planning and Energy Efficiency (Mr. Robert B. Jones): Birmingham, Manchester and London are making excellent progress in

carrying forward their city pride prospectuses. We shall look at what they have achieved before extending the initiative. Meanwhile, there is nothing to stop other cities adopting a city pride approach and I am pleased that Sheffield is doing so.

Mr. Michie: I am interested in that reply because it appears that the Government do not intend to extend the scheme. We must bear it in mind that most towns and cities have pride. Why must they wait for some sort of lottery, which is governed totally by the Tories at Westminster, before they get the resources that they require? Is not the best and most logical way to allocate resources to establish a proper regeneration programme for all cities and towns and to stop messing about with Government diktats?

Mr. Jones: I am sure that the hon. Gentleman would be one of the first to recognise that pride is not restricted to one, two or three cities and is felt throughout the country. However, putting a specific programme in place is a different matter. We are assessing what has happened in the first three cities. The single regeneration budget has benefited enormously not only Sheffield, which receives some £200 million from the private and public sectors as a result of its two successful bids, but rural and suburban areas that have responded well to problems.

Mr. John Marshall: Does my hon. Friend agree that city pride can work only with efficient local government? Has he read the report in today's Evening Standard that Hackney had a policy, which cost the ratepayers £2 million, to employ officials to do nothing? Is he aware of what is happening in Lambeth, where corruption is rife and the council is renowned for its sheer damned inefficiency?

Mr. Jones: My hon. Friend is absolutely right. The records of Lambeth and of Hackney, and indeed of Walsall, mean that the alternative to the Government's city pride programme would be Labour's city shame.

Water Conservation

Mr. Chris Davies: To ask the Secretary of State for the Environment what is his Department's planned expenditure in the current year on measures to promote the conservation of water. [10371]

The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): Measures to promote water conservation among customers are the responsibility of the water companies.

Mr. Davies: Is the Minister aware that the north-west has now experienced some 10 months of below-average rainfall? There is growing concern that, if that continues, not only will there be a dry summer, but circumstances could become very bad indeed in 1997? Does he accept that the Government cannot continue washing their hands of the matter, blaming the water companies and suggesting that it is their sole responsibility? It is time that he accepted his responsibility and produced some measures for water conservation.

Mr. Clappison: The hon. Gentleman realises that it is a serious matter and that the north-west has been affected


by exceptionally dry conditions. We are taking a serious long-term view of the issue. That is why we imposed a duty on the water companies to promote water conservation and gave the Director General of Water Services additional powers. We are also consulting on future byelaws. As my right hon. Friend the Secretary of State said, the Government are looking carefully to learn the lessons of last year's drought. As for the hon. Gentleman's allegations about the water companies, they are in the best place to promote conservation. They have also substantially increased their investment, which this year is more than two and a half times as much as it was when Labour left office. The hon. Gentleman would do well to avoid the trap that was identified by his own policy makers, when they wrote:
The Liberal Democrats do not always practise what they preach and are prepared to ditch environmental policies for short-term political gain".
We shall not do that.

Sir Anthony Grant: Is my hon. Friend aware that Anglian Water has the lowest leakage rate of any water company in the United Kingdom and has spent £110 million on those matters since privatisation? In our area, on this subject as on so many others, we regard the views of the Opposition as total, unmitigated bosh.

Mr. Clappison: I appreciate the comments of my hon. Friend. We recognised in our consultation paper on water services that particular difficulties face Anglian Water and other water companies in the south-east. Those companies have clearly risen to the challenge and provide an efficient service.

Mr. Jack Thompson: This is a serious issue. The Minister may recall that there was a big problem in my constituency earlier this month, when the water supply was lost in half of it because of bursts in the mains system over Christmas and the new year. When those bursts occur in domestic, commercial and industrial premises, the water just drains away. Will the Minister consider, as part of his ministerial responsibility, modifications to the building regulations to include the provision of lagging for water systems, particularly in domestic premises, to minimise that risk?

Mr. Clappison: We would be happy to consider the propositions that the hon. Gentleman has raised when we examine the future of the water byelaws and building regulations.

Single Regeneration Budget

Mr. Forman: To ask the Secretary of State for the Environment if he will make a statement on the quality of the bids his Department received during the second bidding round under the single regeneration budget. [10372]

Mr. Curry: The high quality of the bids received in the second round of the single regeneration budget challenge fund demonstrated the value of competitive bidding. Sutton Regeneration Partnerships and the Wandle Valley Partnership have been successful in both rounds of the challenge fund entirely on the quality of the projects put forward.

Mr. Forman: I am sure that my constituents will be delighted to hear my hon. Friend's commendation of the

quality of the bid that came recently on behalf of Roundshaw, South Beddington and Wallington. Does my hon. Friend agree that the distinguishing feature of that successful bid was the way in which it tried to ensure that there would be the fullest co-operation with the private sector, especially with leading firms in my constituency such as Superdrug, Homebase and Canon UK? Will my hon. Friend ensure that this feature of the regeneration process continues to be a dominant one in Government consideration?

Mr. Curry: I shall certainly do so. First, the essence of our regeneration proposals is that as well as a diverse range of players from the public sector, partners are brought in from the private sector. Secondly, the public sector money that is made available attracts private sector finance. By that approach, we arrive at a much more effective scheme. It is one that is generated by the community and it reflects its priority.

Mr. Rooker: Will the Minister take account, in future, of bids from urban areas that may be classed as outer rather than inner areas? We are in great danger of separating the two. Good bids come from outer areas. In my constituency, for example, one has come in from Kingstanding and south Aston in Birmingham. I make no complaint about the successful bid in respect of the inner-city area of Birmingham. There is no evidence, however, that the Minister's officials take seriously bids from outer areas, simply because they are outer rather than inner. Is the Minister aware that that approach is building up a great deal of resentment in the populations of our great cities?

Mr. Curry: I can reassure the hon. Gentleman. I scrutinise all the bids personally to ensure that they are chosen on merit. There are some, however, who would argue that all the bids should be focused on the inner city. Where discrete and sensible programmes can be put together with proper partnerships, however, they can have a major impact on areas that otherwise might be considered to be relatively well off, even though they contain corners or areas that suffer from deprivation. I am determined that the scheme should continue to have national coverage. Where bids succeed on merit, we shall award resources. That can apply equally to outer parts of our great cities as well as to some smaller rural areas where problems need to be addressed.

Sir Donald Thompson: Is there any method by which unsuccessful bidders can reassess their bids for the next round? Is there any co-operation from his Department to enable such bids to be rejigged to fit the pattern?

Mr. Curry: There is indeed. If bids have not been successful in one round, we have made it clear that the bidders concerned should contact regional offices and go through their bids with them to ascertain where there are deficiencies. In the second round, there are many schemes that failed in the first round. For example, in Pendle there was a bid of poor quality in the first round that became a very good bid in the second. We work with local authorities and other partners to try to get bids into the best possible state so that they are competitive. Once they are in that condition, we judge them on their competitiveness.

Ms Armstrong: I am sure that the House will be pleased that the Minister is now accepting that quality


should be an issue in competitive tendering. That has not been the position to date. Will the Minister tell us how the Government will make the entire system more open? He has implied that Ministers interfere in the process and in decisions and there is no feeling at local level that there is any accountability. Is he aware that it is felt that Government officers are making decisions that should be made openly, properly and accountably in the political process?

Mr. Curry: I did not say that Ministers interfere. I said that Ministers fulfil their proper constitutional duty to scrutinise because we must take responsibility for the outcome. If the hon. Lady does not want Ministers to do that, it will be done, as she falsely describes, by officials. That would not be an accountable system. A Select Committee gave wide approbation to the regeneration scheme and I shall continue to scrutinise the bids to ensure that we get the best possible value for money and that the best bids receive the funds.

Mr. Thomason: Has my hon. Friend noted the conclusion of the Environment Select Committee, that the single regeneration bids represent extremely good value for taxpayers' money? Does he agree that the local and regional offices of his Department have an important role to play in assisting partnerships to come together, and that partnerships that fail can still sometimes undertake work in future by virtue of the communications that they established in putting in a bid?

Mr. Curry: My hon. Friend is right. The job of the regional offices is to facilitate bids and assist people who are bidding. We do not ask people to put it together entirely by themselves without any form of a device or assistance. We want to get the maximum number of people into a competitive position. That is why we have had such successful schemes, and one of the most successful regeneration projects in recent times has been the Hulme redevelopment in Manchester. I am glad to see the Leader of the Opposition praising such a Tory initiative in this field.

Private Residential Accommodation (Leaseholders)

Mr. Etherington: To ask the Secretary of State for the Environment what action he proposes to provide redress for leaseholders in private residential accommodation from unfair treatment by (a) freeholders and (b) managing agents. [10373]

Mr. Gummer: We utterly condemn the behaviour of unscrupulous freeholders, and the measures in the Housing Bill will attack wrong where it occurs and thereby ensure that the bad are driven out and that decent freeholders can continue to offer a valuable service.

Mr. Etherington: Given that answer, will the Secretary of State give an undertaking to the House that no matter how people may try to evade legislation as it is introduced, as they have until now, he will not allow the Government's dogmatic attitude about regulation to prevent them from getting justice?

Mr. Gummer: That proposal has already been introduced by the Government. It is tailored directly to

meet the real needs of those who have suffered as a result of a small minority of unscrupulous freeholders, one set of which I named in the House yesterday, and we shall ensure that the legislation sticks.

Mr. Ashby: Would my right hon. Friend consider amending the Housing Bill to add a clause whereby costs can be awarded against unscrupulous freeholders who refuse reasonably to negotiate with leaseholders in the lands tribunal?

Mr. Gummer: I hope that my hon. Friend will see that I have suggested that we might move cases to the lands tribunal where there is an argument between the leaseholder and the freeholder about the costs. I hope that, after consultation, that will seem to be the right way forward, because it will make the whole process cheaper for the leaseholder who needs so to do. Freeholders who behave in the way in which some have behaved will be liable, for the first time, to criminal sanctions, and that is right.

Mr. Raynsford: The Secretary of State has acknowledged that a number of unscrupulous freeholders and their agents are threatening leaseholders with extortionate service and repair charges, backed by the threat of forfeiture. By all accounts, those pressures are intensifying and will put many leaseholders at risk in the months ahead while Parliament considers the Housing Bill. It is not good enough to wait until that reaches the statute book. The Secretary of State will know that I wrote to him more than a week ago, asking him to introduce a short, streamlined Bill that can go through the House immediately—it would have the support of the Opposition—to give instant protection to leaseholders in difficulty. Will he agree to that request—yes or no?

Mr. Gummer: I note that when we started to legislate, suddenly the Labour party decided that it would have a go. The fact is that it is very complicated legislation, which we have to get precisely right, and the Opposition can help us. If they will allow the Housing Bill to go through the House quickly and expeditiously, as they should—the Bill will give fairness in housing, look after leaseholders and deal with houses in multiple occupation, all of which are good measures—the hon. Gentleman will be seen not to be hypocritical.

Mr. Quentin Davies: Is my right hon. Friend aware that, all too often, leaseholders who attempt to exercise their statutory right to extend their leases or to buy their freehold face a great deal of elaborate and extremely ingenious obstruction from freeholders and their legal advisers? Is he further aware that he will have widespread support in the House for any measures that he introduces to ensure that the will of Parliament as expressed in the existing legislation does not continue to be thwarted in the present way?

Mr. Gummer: I agree with my hon. Friend. That is why I hope that the Labour party will not continue to obstruct the Housing Bill, which will introduce reforms for HMOs and reforms that ensure that those in need get social housing before those in less need. I look forward to the Labour party's support, and then we will get the proposed legislation through.

Sea Pollution

Mr. Welsh: To ask the Secretary of State for the Environment what recent discussions he has had with his European counterparts on reducing pollution of the sea; and if he will make a statement [10374]

Mr. Clappison: My right hon. Friend led the debate in the fourth North sea conference which has agreed a strategy for preventing pollution in the North sea.

Mr. Welsh: Given that this is the third anniversary of the Braer disaster, which showed how vulnerable to pollution our coastline is, will the Minister take further steps to control tanker traffic? Is he aware that the narrow sea route through the Minches daily carries three tankers through an area whose industries are very dependent on a clean environment, and which contains 100 sites of special scientific interest? An accident is waiting to happen. Will the Minister take steps now to prevent that accident?

Mr. Clappison: That is a serious issue for the North sea coast. The hon. Gentleman will know that, following the Braer disaster, the Donaldson report produced 103 recommendations, many of which dealt with this very subject. The Government have accepted a large number of those recommendations, and my right hon. and hon. Friends at the Department of Transport will soon present proposals for their implementation.
The hon. Gentleman will be aware that particular problems are involved in the surveillance and enforcement of oil tankers' discharges and activities. Great care must be taken to protect our coast.

Mr. Allason: Will my hon. Friend give some support to the campaign mounted in the south-west by Surfers Against Sewage, an organisation which is anxious to improve the quality of sea water? Is he aware that Liberal-controlled Torbay borough council does not appear to be willing to reply to letters from Surfers Against Sewage, having originally campaigned on its behalf and encouraged it? Is that not another classic example of Liberal Democrat cynicism?

Mr. Clappison: I am surprised by what my hon. Friend tells me about the Liberal Democrat-controlled council in Torbay, which would have been expected to take an interest in the subject. My hon. Friend will know that, more generally, there has been a big clean-up of our beaches, as there has been a clean-up of our rivers and other waters. Water quality is now improving in our rivers, as it is at the seaside.

Mr. Llew Smith: Will the Minister be having discussions with his European counterparts with a view to offering their expertise to the Australian Government, who plan to monitor the seas in the area where the French nuclear tests took place and to measure the levels of radioactive pollution?

Mr. Clappison: It is important for us to learn all the lessons that we can from international environmentalists. The hon. Gentleman will be interested in the judgments reached about this country by many such

environmentalists, including David Bellamy, who says that our recent record suggests that we are now on the way to becoming the clean man of Europe.
I am sure that the hon. Gentleman will join me in welcoming the large reduction in the amounts of contaminated substances going into the North sea, such as lead, mercury and cadmium. That is a significant achievement.

Water Supply

Mr. Canavan: To ask the Secretary of State for the Environment if he will arrange to meet the chairmen of the water companies to discuss the quality and reliability of water supply. [10375]

Mr. Gummer: I met leading figures in the water industry earlier this month to discuss how they are seeking to safeguard supplies in the summer in the case of a repetition of last year's weather. I press the importance of those matters on them at every opportunity.

Mr. Canavan: How can the water companies possibly justify raking in more than £3,700 in profits every minute, while allowing more than half a million gallons of water to leak away every minute—largely because they have cut capital investment by £282 million since privatisation? Is it any wonder that, in the Strathclyde referendum, 97 per cent. of people voted against the quangoisation of Scottish Water, which they suspect is merely paving the way for the privatisation that has been an unmitigated disaster south of the border?

Mr. Gummer: If privatisation is such a bad thing, why does the hon. Gentleman not ask the hon. Member for Holborn and St Pancras (Mr. Dobson), Labour's spokesman on water, why the National Union of Rail, Maritime and Transport Workers made such a sizeable investment in Thames Water? If the hon. Member for Holborn and St Pancras says that he does not know, it will be very surprising, because he is a sponsored member of the RMT. What is more, it appears that Thames Water dividends pay for his agent and pay his expenses. Here is another example of "say one thing and do another"; it is hypocrisy from Labour.

Mr. Batiste: Does my right hon. Friend recognise that many of us in Yorkshire look for a much improved service from Yorkshire Water in the years ahead, and for sweeping boardroom changes in the company as the best way of achieving it? Is it not clear that, given the existing drought, but for privatisation and the substantial investment made with it, many of us in Yorkshire would have been on standpipes long since?

Mr. Gummer: My hon. Friend is right. In 1976, when the weather was nothing like as extreme, more than 1 million people depended on standpipes or on rota cuts: in the recent weather, no one was so dependent. There are questions to be asked about Yorkshire Water, but it is now possible to ask them, whereas when it was nationalised there was no chance of gaining redress.

Ms Ruddock: Is the Secretary of State aware that pre-payment meters such as Waterkey, which are being trialled in the poorest households, result in higher charges


to the consumer and can and do lead to self-disconnection? Is he further aware that, by providing the means for self-disconnection, water companies' powers contradict local authorities' power to intervene in disconnections on behalf of the most vulnerable people? Will he raise that issue, and its consequences for the poor, when he next meets the people who have become very rich by selling water?

Mr. Gummer: On no occasion when the hon. Lady or other Labour Members have raised these matters have I been unwilling to look into them, and I shall certainly do so, but I hope that she will respect me for displaying characteristic restraint, because I failed to mention the fact that the RMT also has shares in Cable and Wireless, British Gas and electricity companies. When she attacks such people, she is attacking the RMT, nearly 20 per cent. of whose investment is in privatised utilities.

Mr. David Martin: If my right hon. Friend spoke to the chairman of Portsmouth Water Company he would hear that there has been no hosepipe ban since 1976, that it is top of the water quality league and that its water leakage level and water supply charges are the lowest in the country.

Mr. Gummer: There has been no ban since the last Labour Government. Water companies in the privatised world are subject to tough controls. When the water industry was nationalised, there were no independent controls, so the consumer benefits enormously from privatisation, and the Labour party invests in privatised companies.

Regeneration Policies

Mr. Livingstone: To ask the Secretary of State for the Environment if he will make a statement on his current regeneration policies. [10376]

Mr. Curry: Our regeneration policies will focus on the single regeneration budget, which will continue to be distributed on a competitive basis.

Mr. Livingstone: Does the Minister agree that the fact that only one in five bids are successful represents a huge waste in terms of expenditure on consultants' fees and working out schemes? If we could remove that beauty contest element from the policy, the money could be used to improve areas?

Mr. Curry: The hon. Gentleman is factually incorrect, because the success rate is about 50 per cent. If local authorities are not working out how to regenerate their areas, they are clearly deficient in one of their major functions.

Mr. Bellingham: Is my hon. Friend aware that there was great rejoicing in the North Lynn part of my constituency when it was announced that his Department was making available a large amount of single regeneration cash? Will that not make up for the jobs lost at Anglian Canners four years ago and lead to new jobs and welcome environmental improvements? Is it not a good example of the public and private sectors working together?

Mr. Curry: It is an excellent example and it illustrates one of the points made earlier: that these funds can be

spent in regions that are not metropolitan, where considerable needs exist and where they secure considerable benefits. The bid succeeded because it qualified competitively. No one receives an award without qualifying competitively.

Fire Authority Budget

Mr. Mullin: To ask the Secretary of State for the Environment what representations he has received about the fire authority budget for 1997; and if he will make a statement. [10377]

Mr. Curry: My hon. Friend the Member for Croydon, Central (Sir P. Beresford), the Under-Secretary of State for the Environment, met a delegation from Tyne and Wear fire and civil defence authority on 10 January to hear representations about our proposals for the 1996–97 local government finance settlement.

Mr. Mullin: Is the Minister aware that, as a result of the budget announced yesterday, Tyne and Wear fire authority faces the prospect of having to cut 92 fire-fighters and four appliances, but that we could avoid that if he would set the cap higher? Will he please bear that in mind when he determines the cap?

Mr. Curry: There is a set procedure if local or other authorities come to determination. The hon. Gentleman will be aware what that procedure is, and we shall of course pursue it scrupulously. There has been a 2 per cent. increase in Tyne and Wear's permitted budget—£500,000—to allow a catch-up because of the circumstances of last year's settlement. The hon. Gentleman will be aware of the local auditor's report, which suggests where certain savings could be made by the fire authority.

Butterfly and Moth Conservation

Mr. Flynn: To ask the Secretary of State for the Environment what representations he has received regarding new measures for butterfly and moth conservation. [10378]

Mr. Clappison: I shall be glad to hear of the hon. Gentleman's support for the biodiversity action plan, which has been widely welcomed and is being copied by others. It contains, among other things, plans for butterfly and moth conservation.

Mr. Flynn: Is the Minister aware that the priority species, the marsh fritillary, has declined by 62 per cent. in recent years, and that there are threats to four more of its habitats from opencast mining? Will he give an undertaking that the Government appreciate that the marsh fritillary and other butterflies are prime indicators of biodiversity, and will he give an assurance that the Government will protect that delicate and most beautiful living jewel of nature?

Mr. Clappison: The marsh fritillary is one of the species that will benefit from a costed action plan under our biodiversity plans. Our plans will address the points made by the hon. Gentleman. I know that he takes a close


personal interest in the subject, particularly in moths such as the dingy mocha. I am sure that all the matters to which he referred can be taken into account.

Mr. Barry Field: Will my hon. Friend commend to the House the campaign that has been waged on behalf of the Granville fritillary, a butterfly that is found only on the Isle of Wight? Does he agree that urgent action is necessary given the number of endangered Opposition Members with moth-eaten policies?

Mr. Clappison: My hon. Friend is absolutely right. The Isle of Wight produces some remarkable species. Unfortunately, our action plans cannot deal with the problem of the endangered species on Labour's Front Bench—those who practice what they preach.

Mr. Matthew Taylor: May I take it from the Minister's comments that the Government are to adopt the biodiversity action plan and implement its recommendations? They have not publicly said that they will.

Mr. Clappison: Our response to the biodiversity action plan will be made very quickly, but the hon. Gentleman should know about the widespread acclaim that our plans have received and the important initiative that we have taken to promote biodiversity in this country and in the rest of the world.

Home Purchases (Right-to-buy)

Sir Ralph Howell: To ask the Secretary of State for the Environment how many tenants bought their homes under the right-to-buy legislation in the last year for which figures are available. [10380]

Mr. Robert B. Jones: Between October 1994 and September 1995, local authorities and new towns in England reported total sales under the right-to-buy legislation of almost 36,000 homes, while corresponding sales by housing associations totalled almost 700.

Sir Ralph Howell: I thank my hon. Friend for that reply and congratulate the Government on the success and popularity of their right-to-buy policy. Is not it remarkable that, after all these years, we are still selling more than 100 houses a day?

Mr. Jones: The only thing on which I would disagree with my hon. Friend is that it is remarkable. Our policy matches the aspirations of the British public, which is why the Conservative party has been in power since 1979 and the Labour party has been in opposition.

Mr. Betts: Will the Minister confirm that, as an extension of the right-to-buy scheme, the Government introduced a rent-to-mortgage scheme in 1993? Will he also confirm that, by the end of 1995, only 13 houses had been sold under the rent-to-mortgage scheme, at a total cost in promotion of £140,000 of taxpayers' money? Is that not another example of the inefficiency and ineffectiveness of a failed Government and their failed policies?

Mr. Jones: I can certainly confirm that the hon. Gentleman is critical of every policy that we adopt to give ordinary people a chance to own their home. Over the

years, many Labour councillors, and some Labour Members, have taken advantage of the right to buy. The carping attitude of the hon. Gentleman and others is a disgrace.

British Gas Pipeline (Scotland-Northern Ireland)

Mr. Foulkes: To ask the Secretary of State for the Environment what conditions the Health and Safety Executive requires to be satisfied before agreeing to the commissioning of the British Gas pipeline between Scotland and Northern Ireland. [10381]

Mr. Robert B. Jones: The Health and Safety Executive will need to be satisfied that Premier Transco Ltd. has properly assessed the risks to health and safety and fully meets the standards required.

Mr. Foulkes: But how was British Gas able to lay a pipeline along a route that the Ministry of Defence opposed? How did it have a prohibition notice lifted, in spite of the opposition of the Health and Safety Executive? What influence has British Gas in the corridors of power in Whitehall?

Mr. Jones: As the hon. Gentleman knows perfectly well, the route was moved in response to comments made about it. That is why it is north of where it was originally proposed.

Oral Answers to Questions — PRIME MINISTER

United Nations Secretary-General

Dr. Godman: To ask the Prime Minister what discussions he had on the election of a successor to Dr Boutros Boutros-Ghali, Secretary-General of the United Nations, when he last met (a) President Chirac and (b) Chancellor Kohl. [10398]

The Prime Minister (Mr. John Major): None.

Dr. Godman: In addition to a new Secretary-General, is there not a need for a deputy Secretary-General, as advocated by Sir David Hannay, to take charge of administration and finance, thereby allowing the new Secretary-General to re-examine most carefully such serious matters as Lockerbie and Libyan sanctions? At the very least, do we not need a public debate on those appointments and on reform of the United Nations?

The Prime Minister: I certainly agree about the need to reform the United Nations. I raised that at the last meeting of the G7, where there was general agreement about it. In terms of internal reform, I can see some justification for a deputy Secretary-General, and I can certainly see some for a proper reform of the United Nations. By reform, I mean not just a reform of procedures but the abolition of many United Nations bodies that no longer serve a useful purpose.

Engagements

Dr. Goodson-Wickes: To ask the Prime Minister if he will list his official engagements for Tuesday 30 January. [10399]

The Prime Minister: This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Dr. Goodson-Wickes: Is my right hon. Friend aware that the vast majority of my constituents strongly support the Government's measures to give the Attorney-General power to appeal against unduly lenient sentences? Is not the fact that the Labour party voted against that yet another example of hypocrisy?

The Prime Minister: It is a matter of record that the Labour party voted against that measure, but it has voted against many other law-and-order measures over recent months, such as the right to silence. We increased the maximum penalty for cruelty to children from two years to 10—Labour opposed that. We increased the maximum penalty for carrying a gun in crime—Labour opposed us. The reality is that it may sometimes use tough words on crime, but when it comes to actions it is very soft.

Mr. Blair: Conservative Members should remember that under their party crime has doubled.
Does the Prime Minister share and understand the sense of anger of the British people at the behaviour of the privatised water companies? Given the figures released today showing that the cost of delivering water to customers has risen by almost £300 million and that although water companies' profits rose to a record level last year their investment fell, is not it high time that they were properly regulated in the public interest?

The Prime Minister: With reference to his earlier remarks, the right hon. Gentleman might also remember that under this Government crime is falling for the first time in 40 years. [Interruption.] Statistics show that quite clearly, across a whole range of crime, and that is something that no previous Government have been able to say.
When he refers to the privatised water industry, the right hon. Gentleman would do well to remember, too, that "Governments cannot run companies". [Interruption.] I am interested to hear that the Opposition disagree with that, because I was quoting the right hon. Member for Sedgefield (Mr. Blair).

Mr. Blair: Yes, but Governments can regulate those companies, and this Government are not regulating them. Will the Prime Minister confirm that over the past few years investment has been falling, that prices to customers have risen by more than 40 per cent., that 500,000 gallons of water are now being leaked every minute of every day and that customer complaints have doubled? Those are the facts about the water industry under this Government. Why do the Prime Minister, his Cabinet and his other colleagues defend each and every action of the water companies, rather than standing up for the customers who are being fleeced by them?

The Prime Minister: About £15 billion has been invested in the water industry since privatisation, £1 billion more than originally planned. That is because over several decades in the public sector there were not sufficient resources for investment in the water industry or in other public utilities. Of course, there is investment

in them now, not least by the National Union of Rail, Maritime and Transport Workers as a shareholder. That union sponsors the deputy leader of the Labour party; it is one of the stakeholders in the Labour party, and also one of the shareholders in the water industry and in most of the other privatised industries. [Interruption.]

Madam Speaker: Order. We have very little time. Keep quiet.

Mr. Robert Jackson: My right hon. Friend will have seen the lead stories in today's editions of the Financial Times and The Times. Will he confirm that universities are, in law, private bodies, that their financial relations with their students are a matter for them to determine and that the Government have no intention of nationalising the universities?

The Prime Minister: I certainly see no need for universities to introduce top-up fees. They certainly complain about how they have been treated by the Government. Between 1989–90 and 1994–95, university funding rose by 23 per cent. over and above inflation. I hope that the vice-chancellors will recall that when they consider their future policy.

Mr. Ashdown: How does the Prime Minister reconcile his claim last night that the Conservative party is the only party interested in law and order with the fact that although he promised at the general election to increase the number of police officers on the streets by 1,000, the latest figures show that the number has fallen by 1,000? Is that what he means by saying one thing and doing another?

The Prime Minister: I suggest that the right hon. Gentleman looks more carefully at what is happening in law and order. If he does he will see that right across the range, for the first time in 40 years, crime is falling. He will also see the resources there for an extra 5,000 police officers—

Mr. Ashdown: indicated dissent.

The Prime Minister: There is no point in the right hon. Gentleman's living in some Disneyland of his own and waving his hands about; those are the facts. It is the Conservative party that has toughened the law and order position time and again, and his party, and the Labour party, have been in the Opposition Lobby whenever we have sought to do that.

Sir Patrick Cormack: Will my right hon. Friend give the House a firm undertaking that he will not take advice on law and order from the party that would change the meaning of the Sunday joint?

The Prime Minister: I happily give my hon. Friend that assurance.

Mr. Bryan Davies: To ask the Prime Minister if he will list his official engagements for Tuesday 30 January. [10400]

The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.

Mr. Davies: To return to education, does the Prime Minister recall that his Government slashed school


budgets by £500 million last year, causing great difficulty to school heads? Does he recognise that the Government have slashed the higher education budget by £300 million this year, causing great difficulty to vice-chancellors? Why should our institutions and their students suffer because of the Government's economic failure?

The Prime Minister: On the hon. Gentleman's last point, the Government's economic policy is exceeding in a more spectacular fashion than that of any other Government in western Europe. Spending per pupil in the mainstream sector has risen by about 50 per cent. over and above inflation since 1979.

Mr. Blunkett: The true figure is 4 per cent.

The Prime Minister: The hon. Member for Sheffield, Brightside (Mr. Blunkett), Labour's education spokesman, is shouting from a sedentary position. It is a novel relief for him to do so, rather than be undermined by the Labour leader in every single thing that he says about education.
On higher education, the hon. Gentleman would do better to refer to his party's policy document, which says that
Labour is looking to raise funds from individuals using"—
[Interruption.] I apologise for my cold, Madam Speaker, but the reference to Labour's policy document stands. It reveals that
Labour is looking to raise funds from individuals using and directly benefiting from higher education.
That is Labour's own policy document—I hope that it will not deny that policy.

Mr. Thomason: To ask the Prime Minister if he will list his official engagements for Tuesday 30 January. [10401]

The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.

Mr. Thomason: Will my right hon. Friend confirm that selective schools will remain a part of our education system? Did he hear the Leader of the Opposition yesterday ducking and diving on his party's schools policies?

The Prime Minister: Not only yesterday. I am not surprised that the right hon. Gentleman ducks and weaves. The hon. Member for Brightside says that he has no truck with middle-class, left-wing parents who preach one thing and do another. I cannot think who he might have had in mind. The hon. Gentleman tells us to watch his lips—there will be no more selection under a Labour

Government. The party's education spokesman says one thing, while the leader says another. Labour is split on education from top to bottom.

Mr. Tipping: To ask the Prime Minister if he will list his official engagements for Tuesday 30 January. [10402]

The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.

Mr. Tipping: How would the Prime Minister describe someone who, before the general election, promised not to extend the scope of VAT, but after the election extended VAT and imposed it on fuel at 8 per cent.? Would he describe that person as a hypocrite or a liar?

The Prime Minister: The hon. Gentleman should look at the economic performance that has been achieved under this Government. If he does so, I defy him to find any western economy that can match the current performance of this economy under this Government.

Mr. Hawksley: Has my right hon. Friend had time today to read of the four children aged 11 in Handsworth in Birmingham, who have been put through the fast-track education system and who have received the praise of the Leader of the Opposition? Is my right hon. Friend aware that all four have won places at a grammar school, and will he reassure the parents of those children that, under this Government, their grammar school places will be safe?

The Prime Minister: I can certainly offer my hon. Friend that assurance. He highlights yet again the shambles of the Opposition's policy. They say that they support grammar schools, but they oppose selection. They say that they support special treatment for pupils, but they oppose streaming. They say that they support parental choice for the shadow Cabinet, but for no one else.

Mr. Corbyn: To ask the Prime Minister what plans he has to visit Saudi Arabia to discuss human rights. [10403]

The Prime Minister: I have no plans to do so.

Mr. Corbyn: Does not the Prime Minister think that it is time that the British Government put human rights before arms sales, sought an urgent meeting with the Saudi Government on the abuses of human rights there, explained why BBC broadcasts to Saudi Arabia have been censored and explained why the British Government, with their craven attitude towards that autocratic regime, are trying to deport Dr. al-Masari from this country?

The Prime Minister: We and our European partners regularly discuss human rights with the Saudi Arabian Government and with others. I seem to recall that the hon. Gentleman has a rather unusual version of human rights, because it was him who said:
We assert the right of all people to follow their own conscientious beliefs even if it involves them in breaking the law.

Points of Order

Mr. Michael J. Martin: On a point of order, Madam Speaker.

Madam Speaker: Just a moment—I have a point of order from the hon. Member for Congleton (Mrs. Winterton).

Mrs. Ann Winterton: On a point of order, Madam Speaker. I seek to raise an important point of principle and seek your advice and clarification. Is not it a breach of parliamentary privilege that matters decided upon by the courts, for example by an anonymity guaranteeing order, should be raised in the House by means of an early-day motion, thereby exploiting parliamentary privilege to undermine our courts?

Madam Speaker: I was asked early yesterday morning to consider the early-day motion to which I know the hon. Lady refers. I have considered it very carefully, and I am satisfied that it does not breach any existing rule of the House. Specifically, there is no rule of the House to prohibit reference to matters subject to injunction.
I have, however, made it clear on many occasions that all hon. Members must use the freedom of speech that we enjoy in the House, and the freedom of the notice paper, with the greatest care. I think that it might be appropriate for this issue, which has not been looked at by either the Privileges Committee or the Procedure Committee for about 10 years, now to be considered by the Procedure Committee and I am making a reference to that effect.

Several hon. Members: rose—

Madam Speaker: I have given a ruling. There is now no further point of order on that issue.

Mr. Michael J. Martin: On a point of order, Madam Speaker. My point of order relates to the conventions and traditions of the House. I understand that my hon. Friend the Member for Hamilton (Mr. Robertson), the shadow Secretary of State for Scotland, will be replying for the Opposition on the water debate. I also understand that the Secretary of State for Scotland will not be here in the

House, because he is in another part of the country. I wonder whether you could give us a ruling on that matter, Madam Speaker, because I understand that it has long been the tradition of the House that, when a shadow Secretary of State is speaking in a debate, the Secretary of State is normally the person who replies.

Madam Speaker: I have no authority whatever to determine which hon. Members, which Ministers, or which Secretaries of State attend the House. That is for hon. Members and their parties to determine. The Speaker of the House has no authority in those matters.

Mr. Tony Banks: On a point of order, Madam Speaker. This might seem an odd request—

Madam Speaker: It will be most unusual, if it is an odd request.

Mr. Banks: The next time that we have Environment Questions, could you remind the Secretary of State that he should address the House? I do not suppose that we Opposition Members missed much, but we could not hear what he was saying.

Madam Speaker: It is not such an odd request. Many Secretaries of State and Ministers tend to speak to the Member who has asked the question, which is not the way we proceed. All Ministers and all hon. Members speak to this House through the Speaker and they must refer to the Speaker the entire time. They must speak through the microphone at the Dispatch Box and not turn to any individual Member. To do so is a discourtesy to the Speaker and to the House and, moreover, the speech cannot be properly recorded by Hansard.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 101(4) (Standing Committees on Delegated Legislation),

MERCHANT SHIPPING

That the Merchant Shipping (Port State Control) Regulations 1995 (S.I., 1995, No. 3128) be referred to a Standing Committee on Delegated Legislation.—[Mr. Brandreth.]

Question agreed to.

Access to the Countryside

Mr. Paddy Tipping: I beg to move,
That leave be given to bring in a Bill to amend the law of trespass and to enable members of the public to resort on foot to open country in England and Wales for their recreation; and for connected purposes.
The Bill's principal aim is to amend the law of trespass to enable members of the public to resort on foot to open country in England and Wales for their recreation.
There is a long parliamentary history of such legislation. The reforming Liberal Member of Parliament, James Bryce, introduced the first access Bill in 1884. Unfortunately, that Bill and many successors have been blocked or emasculated by landowning interests in Parliament. Despite that fact, the demand and need to protect and extend the freedom of the public to wander on foot over uncultivated land is greater than ever.
Walking is today's most popular leisure activity. This is a time of pressure and stress. People need space in which to walk, unwind and reflect. The Bill will benefit walkers throughout England and Wales, from the chalk downlands of Sussex to the Cheviot hills of Northumberland, from the Cumbrian mountains in Wales to the Sussex coastline. In the forest of Bowland in Lancashire, the Arran hills of Wales, parts of the Pennines and the Chiltern escarpment, local people have been pressing for many years for a right to roam over uncultivated land.
There and in other parts of the country, there has been a tradition of open access—a de facto right to roam. Those rights have gradually been eroded. The piecemeal disposal of Forestry Commission woodland has meant that in recent years the public have lost the right to roam over an area about the size of the Isle of Wight.
Some months ago, my family and I were asked to leave woodland called Cotgrave forest in Nottinghamshire. Those woods have been walked by local people for years. The sale of the woods by the Forestry Commission to landowners has put an end to that access. The Bill will tackle that.
Against that background, it is important to stake out the rights and responsibilities of both walkers and landowners. The Bill gives a right to roam in the remote places—mountain and moorland, commonland, woodland and beside rivers. It is not an unrestricted right to roam. Exclusions are to be granted to take into account shooting and conservation interests. I fully recognise that there are a wide variety of stakeholders in the countryside. The Bill attempts to balance those needs.
Rights and responsibilities are linked under the Bill. It sets out responsibilities and a new standard of behaviour for the public while walking on open country. The first schedule describes in detail the prescriptions and restrictions put on walkers. It includes, for example, control of animals, litter and fires. Walkers will be regarded as trespassers if they break the restrictions.
The Bill is not set in tablets of stone. I see it as a vehicle for debate about the way forward, as it is a subject that can be riddled with prejudice. These are hard issues, which need careful thought and analysis.
Consultation on the Bill will be wide and has, indeed, already started. Conservation groups have an interest in the Bill. Walkers, like conservationists, want to lift the landscape and enhance the environment. We need to protect animal, bird and plant life.
I am grateful for the time and interest that landowning organisations have already given to the Bill. Meetings have taken place with the Country Landowners Association and the National Farmers Union. While there is a commonality of interest and both organisations accept that there is a need for even greater access to the countryside, there are differences of view about how that should be achieved. I understand that the Country Landowners Association will produce its proposals on access later this year. I look forward to seeing them and I know that they will receive careful consideration and close scrutiny.
Suffice it to say that negotiated access—the voluntary approach—has failed to deliver substantial new access. I am pleased to report that both farmers and landowners have shown a willingness to take such discussions forward. They have reservations about the Bill and I acknowledge that it may be possible to refine and improve it. At this stage, the Bill should be regarded as the first step on a route to allow greater public access to open countryside. I hope that when it crosses its first stile today, it will be viewed as offering a signpost to the future.
I look forward to the day, perhaps under a different Government, when the Bill will become law. I believe that it is practical, reasonable and follows English legal precedent. It is practical in the sense that it provides draft legislation, which can be implemented on the ground. It is reasonable in that is not a utopian demand for everything that the access lobby would wish for in an ideal world.
Opponents of the Bill should accept it at face value and in good faith. To characterise it, as some have, as allowing unrestricted access reveals prejudice and vested interest. It is an attempt to address all countryside interests without causing substantial harm to any. It is a balancing act. Consultation will reveal whether that balance is right.
The Bill offers nothing alien. There is already a long-standing tradition of freedom to roam in Britain. Unfortunately, in many places it is under threat or has already disappeared. The Bill follows legal precedent. I praise the Ramblers Association and its legal advisers for all the hard work that they have put into drafting it. Wherever possible, it draws on existing legislation, principally the National Parks and Access to the Countryside Act 1949.
I am conscious that I have concentrated on the restrictions and exemptions in the Bill. That reflects my desire to reassure the many differing interests involved. However, in essence the Bill is about lifting restrictions. Its principle is freedom. It offers the prospect of substantial new access to the general public.
I was born in an industrial community in the West Riding, a place where "dark satanic mills" really existed. I can still recall the joy and exhilaration of walking, as a boy, over the tops of the Yorkshire dales. I truly felt that I had discovered England's "green and pleasant land" and, to a small extent, I felt that I shared Blake's vision.
Thirty years ago I was ordered off the moors in Yorkshire by gamekeepers even though I was on a public footpath. Yesterday I was in the hills and snow in the


south Pennines between Sheffield and Manchester. There was barely a building in sight, but we were not allowed to walk on open moorland. Large signs that said "Keep out" and "No public access" made progress impossible. I want those signs confined to the dustbin of history. They should be museum pieces.
People are looking forward to the year 2000 and the next millennium—a time of renewal, of hope and, perhaps, of increased spirituality. The Access to the Countryside Bill draws on the old, traditional rights to roam and puts them into a new legislative framework. Its passage would indeed be the way to celebrate the next millennium.

Mr. Tim Yeo: I rise to oppose the Bill.
The hon. Member for Sherwood (Mr. Tipping) by his speech, and the Bill prepared by the Ramblers Association by its text, have demonstrated how little the hon. Gentleman and his party understand the countryside and the needs of those who live, work and seek to enjoy recreation there. In pursuit of an aim that is widely shared among Conservative Members and among those outside the House, of greater access to the countryside—an aim, incidentally, on which we are making substantial progress, although the hon. Gentleman did not acknowledge that in his speech—he has produced a legislative dinosaur, a monstrosity that is flawed in five serious respects.
The Bill would give local authorities massive and totally unnecessary new powers. It would create a vast new bureaucracy with almost unlimited scope for disputes between parties and for delays in decision making. It emphasises the rights of the public without mentioning corresponding responsibilities. It threatens to criminalise innocent citizens who seek only to protect their property. It also damages the cause of conservation.
Significantly, those are the proposals not just of the hon. Member for Sherwood; he has the express endorsement of the Opposition Front Bench in the form of the hon. Member for Dewsbury (Mrs. Taylor), who was quoted yesterday as saying that she fully supports the Bill and hopes that it may lead to the passage of legislation. As the Bill's approach is based on old Labour's attitudes, it is surprising that it has slipped past the notice of the right hon. Member for Sedgefield (Mr. Blair), but perhaps his attention has been diverted elsewhere recently as he agonises whether to preach the education policy that he and the hon. Member for Peckham (Ms Harman) already practise.
The tragedy is that the Bill is totally unnecessary. The Government are already working towards greater public access. For example, in the past five years alone, land management schemes have produced agreement for managed access to more than 90,000 hectares of land. Under the countryside stewardship scheme, statutory bodies have made available another 13,000 hectares, and substantial progress has been made towards the target set in the 1990 environment White Paper to bring up to a good standard the 140,000 miles of rights of way and footpaths that already exist, much of which is under-utilised at present.
The target of improving access to the countryside was specifically re-endorsed in last October's White Paper, "Rural England". Against that background, I deeply regret

that the hon. Gentleman has chosen to introduce the Bill now because, in so doing, he rejects the principle that better access to the countryside must be based on voluntary managed schemes. Overturning that principle, on which all recent advances have been made, is a recipe for dispute, delay, conflict and, ultimately, damage to the rural environment.
My first objection to the Bill is that it gives vast and completely unnecessary new powers to local authorities. Clause 6 places a duty on local authorities to secure access to any open country from the public highway if any person, regardless of whether he or she has local connections or not, considers that the existing access is somehow inadequate. Local authorities may require landowners to construct bridges, cut down ancient hedges or demolish stone walls, all at their own expense, to satisfy the whim of a council officer whose interest in the subject may have been aroused by a passing motorist or disgruntled neighbour. The mind boggles at the potential for local authorities hostile to local interests—as all too many, including the disgraceful Labour-Liberal Suffolk county council, now are—to intrude on private property and make mischief with valuable habitats and natural features.
My second objection to the Bill is that the extra bureaucracy involved and the inevitability of disputes about interpretation will cause countless problems. Clauses 2 and 3 purport to define what is and is not open country, but they raise more questions than they answer.
Years of argument will ensue before agreement is reached about specific areas of land. The onerous obligations placed on landowners—including, for that purpose, someone who may have only a quarter of an acre of rough grazing on the edge of a village—mean that there will be inevitable resistance to the designation of land as open country under the legislation.
The interminable delays already experienced when minor variations to existing footpaths are proposed, sometimes with universal local support, but objected to by some individual from a remote area, will be nothing compared with the delays that the Bill is likely to cause. The effect will be to halt, for a generation or longer, the steady current progress towards more access.
My third objection to the Bill concerns two new criminal offences that it creates; the first is obstructing access to open country, and the second is erecting notices that might deter the public from entering open country. Criminalising in that way landowners who may merely be innocently seeking to protect their property, or to keep people away from hazardous areas, may appeal to the hon. Member for Sherwood and his allies, but it is utterly irrelevant and deeply inimical to the needs of the countryside. Rural dwellers in Suffolk and other similar areas want help in protecting their property, not threats that may put them on the wrong side of the law.
My fourth objection to the Bill is that it imposes all those obligations on landowners, but—apart from references that the hon. Member for Sherwood made to not dropping litter or starting fires—it makes no mention of any corresponding duties on members of the public. That may well be what Labour means by a stakeholder society, and it reflects old Labour's tendency to emphasise rights while overlooking responsibilities, but the Bill even fails to acknowledge that the countryside is used for other recreations apart from walking. Activities such as riding


or bird watching are legitimate uses of the countryside, but they may sometimes come into conflict with unrestricted walking.
To curtail the right to roam over a specific piece of land, an application to the local authority would be required under the Bill. The Bill would thus involve, for example, a Riding for the Disabled group going on bended knee to a council lackey for permission to use rough grazing land made available for that purpose free of charge by the landowner. Similarly, a small tenant farmer hoping to enjoy a day's shooting with a few neighbours would have to apply to the local authority each time he wished to do so.
My final objection to the Bill is that nothing in it promotes the cause of conservation. Indeed, the strong probability is that conflicts will arise as the unrestricted right to roam affects areas that have hitherto enjoyed considerable protection and undisturbed peace. Even English Nature, the statutory body entrusted with great responsibilities by the House, will have to apply to the local council for land to be accepted for the right to roam, and such applications can be granted only temporarily and may subsequently be overruled at the whim of the local council.
Time does not permit a fuller explanation of the many other reasons for resisting the Bill. In conclusion, I return to the central issue of principle.
Good progress is currently being made towards improving access for everyone so that they may enjoy more of our countryside. That progress is achieved voluntarily, by agreement between the parties concerned, and generally involves landowners and others in the continuing management roles.
The Bill would bring all that progress to an immediate halt. Its consequences for everyone interested in the future of the countryside would be disastrous, and I urge the House to reject it by a huge majority.

Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—

The House divided: Ayes 144, Noes 60.

Division No. 38]
[3.53 pm


AYES


Ainger, Nick
Cann, Jamie


Ainsworth, Robert (Cov'try NE)
Chisholm, Malcolm


Alexander, Richard
Clapham, Michael


Anderson, Ms Janet (Ros'dale)
Clwyd, Mrs Ann


Armstrong, Hilary
Coffey, Ann


Austin-Walker, John
Cohen, Harry


Banks, Tony (Newham NW)
Corbett, Robin


Barnes, Harry
Corbyn, Jeremy


Battle, John
Cousins, Jim


Bayley, Hugh
Cox, Tom


Bennett, Andrew F
Cummings, John


Benton, Joe
Cunliffe, Lawrence


Blair, Rt Hon Tony
Cunningham, Jim (Covy SE)


Bray, Dr Jeremy
Dalyell, Tam


Brown, N (N'c'tle upon Tyne E)
Davies, Chris (L'Boro & S'worth)


Burden, Richard
Davies, Ron (Caerphilly)


Byers, Stephen
Denham, John


Callaghan, Jim
Dewar, Donald


Campbell, Mrs Anne (C'bridge)
Dixon, Don


Campbell, Ronnie (Blyth V)
Dobson, Frank


Campbell-Savours, D N
Donohoe, Brian H


Canavan, Dennis
Dowd, Jim





Eagle, Ms Angela
Martlew, Eric


Eastham, Ken
Michael, Alun


Etherington, Bill
Michie, Bill (Sheffield Heeley)


Evans, John (St Helens N)
Morley, Elliot


Faulds, Andrew
Mullin, Chris


Foulkes, George
Murphy, Paul


Fyfe, Maria
Oakes, Rt Hon Gordon


Gapes, Mike
O'Brien, William (Normanton)


Garrett, John
O'Hara, Edward


Gerrard, Neil
Olner, Bill


Godman, Dr Norman A
Orme, Rt Hon Stanley


Golding, Mrs Llin
Pickthall, Colin


Griffiths, Win (Bridgend)
Pike, Peter L


Grocott, Bruce
Pope, Greg


Gunnell, John
Powell, Ray (Ogmore)


Hanson, David
Prentice, Bridget (Lew'm E)


Hardy, Peter
Prentice, Gordon (Pendle)


Heppell, John
Quin, Ms Joyce


Hill, Keith (Streatham)
Radice, Giles


Hinchliffe, David
Raynsford, Nick


Hodge, Margaret
Robertson, George (Hamilton)


Home Robertson, John
Robinson, Geoffrey (Co'try NW)


Hood, Jimmy
Roche, Mrs Barbara


Howarth, George (Knowsley North)
Rogers, Allan


Howells, Dr Kim (Pontypridd)
Rooker, Jeff


Hoyle Doug
Rowlands, Ted


Hughes, Robert (Aberdeen N)
Ruddock, Joan


Hughes, Roy (Newport E)
Sheerman Barry


Illsley, Eric
Sheldon, Rt Hon Robert


Ingram, Adam
Simpson, Alan


Jackson, Glenda (H'stead)
Skinner Dennis


Jackson, Helen (Shef'ld, H)
Smith, Llew (Blaenau Gwent)


Janner, Greville
Spearing, Nigel


Jones, Barry (Alyn and D'side)
Spellar, John


Jones, Jon Owen (Cardiff C)
Steinberg, Gerry


Jones, Lynne (B'ham S O)
Strang, Dr. Gavin


Jowell, Tessa
Straw, Jack


Kaufman, Rt Hon Gerald
Taylor, Mrs Ann (Dewsbury)


Khabra, Piara S
Thompson, Jack (Wansbeck)


Kilfoyle, Peter
Timms, Stephen


Lloyd, Tony (Stretford)
Tipping, Paddy


Lynne, Ms Liz
Walley, Joan


McAllion, John
Wareing, Robert N


McAvoy, Thomas
Welsh, Andrew


Mackinlay, Andrew
Wilson, Brian


MacShane, Denis
Wise, Audrey


Mahon, Alice
Wray, Jimmy


Marek, Dr John
Wright, Dr Tony


Marshall, David (Shettleston)
Tellers for the Ayes:


Marshall, Jim (Leicester, S)
Ms Rachel Squire and


Martin, Michael J (Springburn)
Mr. Mike Hall.




NOES


Aitken, Rt Hon Jonathan
Hamilton, Rt Hon Sir Archibald


Allason, Rupert (Torbay)
Hamilton, Neil (Tatton)


Arnold, Jacques (Gravesham)
Harris, David


Atkins, Rt Hon Robert
Hawksley, Warren


Banks, Robert (Harrogate)
Hayes, Jerry


Beggs, Roy
Howell, Sir Ralph (N Norfolk)


Bottomley, Peter (Eltham)
Hughes, Robert G (Harrow W)


Brown, M (Brigg & Cl'thorpes)
Jessel, Toby


Budgen, Nicholas
Kellett-Bowman, Dame Elaine


Butterfill, John
King, Rt Hon Tom


Carrington, Matthew
Lawrence, Sir Ivan


Chapman, Sir Sydney
McCrea, The Reverend William


Cope, Rt Hon Sir John
Maginnis, Ken


Davies, Quentin (Stamford)
Maitland, Lady Olga


Dover, Den
Mills, Iain


Durant, Sir Anthony
Moate, Sir Roger


Emery, Rt Hon Sir Peter
Monro, Rt Hon Sir Hector


Fowler, Rt Hon Sir Norman
Neubert, Sir Michael


Fox, Sir Marcus (Shipley)
Nicholls, Patrick


Gill, Christopher
Nicholson, David (Taunton)


Grant, Sir A (SW Cambs)
Onslow, Rt Hon Sir Cranley


Greenway, Harry (Ealing N)
Powell, William (Corby)






Shaw, David (Dover)
Thompson, Patrick (Norwich N)


Shaw, Sir Giles (Pudsey)
Townsend, Cyril D (Bexl'yh'th)


Shepherd, Sir Colin (Hereford)
Wardle, Charles (Bexhill)


Sims, Roger
Wiggin, Sir Jerry


Smyth, The Reverend Martin
Winterton, Nicholas (Macc'f'ld)


Spicer, Sir Michael (S Worcs)
Yeo, Tim


Spring, Richard



Stephen, Michael
Tellers for the Noes:


Thomason, Roy
Mr. John Greenway and


Thompson, Sir Donald (C'er V)
Sir Kenneth Carlisle.

Question accordingly agreed to.

Bill ordered to be brought in by Mr. Paddy Tipping, Mr. John Battle, Mr. Andrew F. Bennett, Ms Ann Coffey, Mrs. Helen Jackson, Mrs. Jane Kennedy, Mr. Gordon Prentice, Mr. Stephen Timms and Ms Joan Walley.

ACCESS TO THE COUNTRYSIDE

Mr. Paddy Tipping accordingly presented a Bill to amend the law of trespass and to enable members of the public to resort on foot to open country in England and Wales for their recreation; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 8 March and to be printed. [Bill 49.]

Opposition Day

[3RD ALLOTTED DAY]

Privatised Water Companies

Madam Speaker: I have selected the amendment standing in the name of the Prime Minister.

Mr. Frank Dobson: I beg to move,
That this House notes the deplorable record of the privatised water companies in England and Wales who have been allowed to use their monopoly position to drive up prices, profits and the pay and perks of directors while reducing investment, wasting water and harming the environment; and calls upon the Government not to proceed with setting up water agencies in Scotland which are clearly precursors of the same things happening in Scotland and to abandon its secret agenda to force metering on every household.
Every week, 721 million gallons of water leak from the pipes owned and operated by Yorkshire Water, yet Yorkshire Water has been spending just £211,000 a week to identify and mend these leaks. Recently Yorkshire Water has been forced to spend about £3 million a week tankering water into West Yorkshire to make up for the water that is leaking away. It is spending 14 times as much on tankering as it is on stopping leaks. Nothing could better illustrate the wasteful short termism of Yorkshire Water. It is having to cough up £3 million a week for tankering because it did not spend enough on plugging leaks and did not have the forethought to prepare for the crisis that occurred in West Yorkshire last summer, which still continues.
It is not only in Yorkshire that the bosses of the privatised water monopolies have been mismanaging the country's water supplies and ripping off the public for the benefit of their shareholders and themselves. It has been happening everywhere. We could not expect anything better. Water privatisation has been a rip-off from start to finish.
Let us consider the basic facts. For a start, the Government gave the industry away to its new owners. When the Government sold the shares they obtained £5.2 billion for the taxpayer. But they gave the new owners much more than that in exchange. The new owners were given a debt write-off worth £5 billion and a green dowry worth £1.5 billion. In exchange for the £5.2 billion that they paid in, they received £6.5 billion of taxpayers' money plus the capital assets of the industry, a highly skilled and dedicated work force and a guaranteed income stream from being monopoly suppliers of water, something which none of their customers can do without.
What has happened since then? Prices have increased. The main reason for that has been charging customers more so that more and more can be paid out to shareholders. The average delivered cost of water—

Mr. Robert Atkins: Will the hon. Gentleman give way?

Mr. Dobson: I shall give way to the hon. Gentleman provided that he asks a sensible question. If he does not, I shall not give way again.

Mr. Atkins: I wish to ask the hon. Gentleman a simple question. Does he expect that the charges for water will be less under a Labour Government?

Mr. Dobson: In real terms, yes.
The average delivered cost of water is made up of three factors: first, the cost of operations; secondly, the cost of capital maintenance; and, thirdly, the return on capital. The average delivered cost to customers of a cubic metre of water has risen by 14 per cent. from 55p to 62.8p in the past three years. That is not the result of massive increases in the cost of operations, which has increased by only 3.8 per cent. Nor is it the result of capital maintenance costs, which have increased by 8.3 per cent. The massive change is because the return on capital has shot up by 32 per cent. In other words, customers are paying extra because more of their money is being siphoned off to the shareholders.
That disgraceful situation does not seem to have been noticed by the regulator or the Government. If they have noticed, they must approve of it, because they have done nothing about it. But, of course, that is true about practically everything else to do with the water industry. The water companies have been allowed to get away with practically anything. Just look at the profits. The profits of the 10 privatised water companies have shot up to almost £2 billion a year. Average dividends to shareholders have shot up by no less than 55 per cent. There are some even more startling individual performances and pay-outs. Northumbrian Water's profits have almost doubled. They have increased by 91 per cent. No wonder it was targeted by the French, who wanted to buy it.
Just as startling is South West Water, where profits have fallen but dividends have shot up by 41 per cent.

Mr. Patrick Nicholls: Will the hon. Gentleman give way?

Mr. Dobson: How lucky for the shareholders that South West Water is not on performance-related pay-outs.
In view of Yorkshire Water's appalling performance, not just now but over several years, its customers will find it hard to stomach the 60 per cent. increase in dividend that it paid out.

Mr. Nicholls: rose—

Mr. Dobson: I shall not give way to the hon. Gentleman.
Then, of course, there is the massive increase in pay and perks that water company directors have paid themselves. The best paid boss in each water company is now paid more than three times as much as when the companies were owned by the public. A really breathtaking example of boardroom greed is that of Thames Water. Before privatisation, the chief executive was paid £41,000 a year. The present chief executive, Mr. Mike Hoffman, is paid £371,000 a year—a cool 806 per cent. increase.

The Secretary of State for the Environment (Mr. John Gummer): If it is such a terrible thing, why does the union that sponsors the hon. Gentleman have a large shareholding in Thames Water, take the profits and use it to pay for the hon. Gentleman's research and his agent?

Mr. Dobson: Will the right hon. Gentleman withdraw half of what he said? [Laughter.] I am in favour of accuracy when these accusations are being thrown around. The RMT, I am glad to say, pays part of the costs of my

agent. The RMT makes no contribution to anyone doing research in my office, and I now expect the Secretary of State to get up and withdraw that allegation.

Mr. Gummer: I am happy to withdraw the second part if the hon. Gentleman will answer the main claim—that the RMT has money in a former nationalised industry called Thames Water, which, the hon. Gentleman said, was ripping off the public for the benefit of its shareholders. Its shareholders in this case are the RMT, which sponsors the hon. Gentleman. He says one thing and does another. It is hypocrisy again.

Mr. Dobson: I expect the RMT—and I say this without consulting anybody—if it is a direct shareholder to make representations at the next annual meeting to reduce the dividends and to reduce the pay of this overpaid chief executive, because that is what it should do.

Sir Donald Thompson: Will the hon. Gentleman give way?

Mr. Dobson: I shall give way to Donald in a minute, because he is a sensible person, but when we get to Yorkshire Water.
At North West Water, the chairman's pay shot up by 667 per cent. from £47,000 to £360,000, although the present chairman is always quick to point out that he is not the same man. He certainly would not have turned out for just £47,000 a year.

Mr. Gummer: If North. West Water is as bad as that, why does Labour-controlled Derbyshire county council have very large shareholdings in North West Water? Why does it also have very large shareholdings in South West Water, which is nowhere near Derbyshire?

Mr. Dobson: I simply do not know the details of the case [Interruption.] Whatever the Secretary of State may do, for example flinging false accusations against me, I do not try to comment on matters about which I do not know the detail. What is fairly likely—although I do not know—is that Derbyshire county council has a pension scheme for its staff and its pensions advisers say, "You get a lot of money if you invest in these things," and that is what they have done.
Let us be quite clear about the position. Four things have shot up since privatisation: profits, dividends for shareholders, bosses' pay and bosses' perks. All those increases have been paid for by another increase—the rise in water prices that customers have been forced to pay. Last year, the water industry made the highest profits since privatisation, while investment fell to its lowest level since privatisation.
The Government claimed that investment had gone up, and it did at first, but it has fallen by 10 per cent. since 1990–91. That, of course, is the average; over that period, North West Water cut investment by 19 per cent., Thames Water by 29 per cent. and Northumbrian Water by 30 per cent. Almost inevitably, Yorkshire Water out-performed the rest, cutting its investment by 34 per cent. That is indefensible behaviour, but it is worse than that: it is a fraud on the customers.

Sir Donald Thompson: rose—

Mr. Dobson: I will finish this paragraph, Donald, and then I will give way.

Madam Speaker: Order. The hon. Gentleman has now addressed the hon. Member for Calder Valley (Sir D. Thompson) as "Donald" on two occasions.

Mr. Dobson: I am sorry, Madam Speaker.

Madam Speaker: I accept the hon. Gentleman's apology. I am sure that he will see that it does not happen again.

Mr. Dobson: I will indeed, Madam Speaker.
As I was saying, that cutting of investment is a fraud on the customers. Part of the price formula agreed by the regulator allowed the companies to charge customers more to fund investment in maintaining the system. Needless to say, they have been allowed to charge the customers, but have not got round to spending all the takings. Anyone else who did that would be open to the charge of obtaining money by false pretences, but the regulator and the Government do not seem to mind, so the companies have got away with it.
I will now give way to the hon. Member for Calder Valley (Sir D. Thompson).

Sir Donald Thompson: The hon. Gentleman is on a good point, and I thank him for his courtesy in giving way. He and I share a photocopying machine. As I passed it this afternoon, I saw a huge wodge of Labour water documents. Who will be paying for those? Will the hon. Gentleman be sending money to the Serjeant at Arms, or will he be writing to you, Madam Speaker, with an apology? We all use photocopiers for one or two documents, but, as the hon. Gentleman is highlighting the problem of fraud, may I ask who will pay for that huge wodge?

Mr. Dobson: I must tell the hon. Gentleman—if it is appropriate to say this to a former butcher—that what is sauce for the goose is sauce for the gander.

Sir Donald Thompson: On a point of order, Madam Speaker. I am a butcher, but the hon. Gentleman has the tripe. [Laughter.]

Madam Speaker: I see that that was enjoyed by Opposition Front Benchers, but it was not a point of order.

Mr. Dobson: It was funnier than most points of order, I must admit.
The Government also claim that the water industry is paying a lot of tax. That is not true either. The total mainstream corporation tax paid in the five years since privatisation is just £106 million; over the same period, the companies have made profits of more than £7,838 million. That is a tax rate of 1.3 per cent. The companies have paid another £580 million in advance corporation tax, but that can be set off against their future liabilities.
The cumulative effect is that the water companies are rolling in money. One sure sign of that is the takeovers, and the rumours of takeovers. The cash in the coffers of the water companies makes them both potential predators and potential victims. They are rolling in money, so they are worth taking over; alternatively, they are rolling in money and so can afford to mount a takeover.
Northumbrian Water fell into the first category. It was worth so much, both in terms of assets and as an "income stream", that Lyonnaise des Eaux took it over to combine it with North East Water, which it already owned. So what is happening now? More than 3,000 hard-working staff from two companies face losing their jobs, while the boss of Northumbrian Water receives a payoff in excess of £1 million.
Then there is North West Water. That is the company that managed to spend millions of pounds on a computerised billing system that did not work. It is the company that leaks most water—158 million gallons every day. It is the company that can only manage to find £8 million, spread over five years, to combat those leaks. Yet North West Water was so swilling in money that it could find no less than £1.7 billion to buy up Norweb. It has tried to tell me that none of that money comes from its water customer, but if you believe that you will believe anything. North West Water has water company assets, including real estate, that it got for nothing after privatisation, together with the guaranteed monopoly income stream from its water customers. Without that capital and guaranteed income behind it, every penny of which was paid for by people and businesses in the north-west, it would not have been able to afford the takeover.
One of the ways in which companies have saved money has been to get rid of staff, and it shows in the constituency of the hon. Member for Calder Valley, the tripe merchant. Some of Yorkshire's problems were caused by reservoirs silting up and the channels that feed the reservoirs getting blocked because the company had got rid of the maintenance staff who used to clean them out. After the freeze and the thaw in the north-east, water companies there could not respond quickly enough because they too had reduced staff numbers in the name of efficiency.
Talking of North West Water brings me back to the matter of leaks. As the National Rivers Authority stated:
Leakage is an area where in expertise the UK is without doubt a world leader".
How true. No one is more expert than North West Water and Yorkshire Water, which waste about one third of their whole supply. Wessex Water, South West Water, Severn Trent and Thames Water lose one quarter of theirs.

Sir Anthony Grant: Not Anglian Water.

Mr. Dobson: No, not Anglian Water.
All that water has been collected and purified, ready for use by domestic customers and industry, so customers have paid for all that process—they are just not getting the water.
For a long time, the Government told the House that customers wasted more water than the companies. The only possible explanation for that was ignorance or lying. On average, companies are responsible for 78 per cent. of all the water that is leaked—on average, customers leak 22 per cent. If people are looking for a water waster, they need look no further than the nearest water company. Yorkshire Water, almost inevitably, is the worst, wasting 87 per cent. of its water supply, while careful Yorkshire customers lose only 13 per cent. Either Ministers did not know or they tried to mislead the House and the public.


We are entitled to know why from the Secretary of State, especially as Conservative Ministers have mocked both myself and several of my parliamentary colleagues when we have said, truthfully, that it was companies that wasted most water.
That suited the Government's secret policy agenda, which they share with the regulator. They want to push for everyone to have a meter. Apparently, again, either they do not know or do not want to know that it would cost between £4 billion and £5 billion to install meters in every home, and an extra £500 million a year to run the new billing system. Apparently, they do not care about the consequences of forcing meters on poor families and pensioners, and they cannot say that they know about that because it has never been studied, not even in the pilot scheme on the Isle of Wight. They are just obsessed with the idea of introducing metering.
The Government always try to blame customers. They gave the industry, when it was privatised, a code of practice for leaks. It refers only to customers' leaks. In the last Environment Bill, they slipped through a late amendment to require water companies to promote the efficient use of water, but not by the companies, only by their customers. It is all part of the push for compulsory metering.

Mr. Robert Banks: I thought I heard the hon. Gentleman say a minute ago that Yorkshire Water had reported that 87 per cent. of its water was wasted due to leakage. I do not believe I heard the right figure. Would he like to rephrase what he said? Secondly, he must understand that a number of water companies, such as the York Waterworks company in my constituency, have been private companies for many years. It has been a private company for 150 years and it has an excellent record to report.

Mr. Dobson: There are two points there. First, I think that the hon. Gentleman must have misheard me. I said that, of the water that is leaked in the Yorkshire Water region, 87 per cent. is leaked by the water company's pipes. As he would expect in Yorkshire, only 13 per cent. is leaked by folks who are rather careful and do not want leaks on their premises. Secondly, he is right: there are statutory water companies. They have existed for more than a century and they have provided a good service, generally speaking. They have proved to be infinitely more efficient at their jobs than were the privatised water companies, and, I must say, they pay their directors a hell of a lot less than do the privatised companies. Last summer, we revealed—for the first time in figures that people can understand—the scale of the leakage. The water companies leaked 826 million gallons a day, or 500,000 gallons a minute. We called for action to cut the leaks and to protect customers from the drought, but the industry's response was a statement by the Water Services Association which said:
Frank Dobson is not treating customers seriously—customers want the facts.
The trouble for the water companies was that, for the first time, customers were getting the facts, and they did not like them.
The water industry and the Government then issued a briefing, off the record, to the effect that the industry was investing £4 billion to deal with leaks. That was simply

not true, so we put out more facts which showed what the companies were really spending on leaks. They were based on figures that we received from each company apart from Southern Water and South West Water, which either could not or would not tell us. The total amount spent in England was £86 million, which is rather a long way short of the £4,000 million that the Government had originally claimed.
At that point, the Secretary of State organised a photo-opportunity, said that he was very impressed by what the water companies had done and told us all to stop moaning and say what wonderful weather we were having. After an interval that the Daily Mail described as
10 Days that shook John Selwyn Gummer",
the Secretary of State published a document that acknowledged the need to conserve water. As usual, however, he put the onus on the customers. A week later, he boldly stated that he might have to take action, but that he could not make up his mind until he had seen the National Rivers Authority report.
Two months later, the NRA published its report. It vindicated our campaign and said that cutting company leaks was twice as useful as installing meters, and that the water regulator was not doing enough to require the companies to reduce their own leaks. Soon afterwards, even the water companies admitted that leakage levels were unsatisfactory, but said that they would set their own targets for reducing the leaks. The hapless Secretary of State agreed and said that he would not set mandatory targets. On the instructions of the Tory chairman, he still did not dare criticise the companies because that would be to admit that the Tory sacred cow of water privatisation was suffering from its own version of mad cow disease.
Everyone now realises that the water companies are letting people down. Customers and businesses realise that they have been let down. The NRA has criticised them and, though a little late in the day, so has the water regulator.

Sir Anthony Grant: I am sure that the hon. Gentleman wants to paint a fair picture of the industry. If so, is he aware that, as well as improving water quality by 34 per cent., Anglian Water has in the past five years spent no less than £1.715 billion on improving water and sewage services? That is why customers in the Anglian Water area are receiving a much better deal, a fact with which I am sure the hon. Gentleman would agree.

Mr. Dobson: It has to be said that the average bill for people in the Anglian Water area is considerably more than that for other people. However, in fairness to Anglian Water, customers receive a fair bit in return. My only objection to Anglian Water is that it is absolutely obsessed with the idea of water metering and wants everyone forced on to a meter.
The chairman of Yorkshire Water has decided that he is giving up; the chief executive of South West Water has decided to give up; and the boss of Wessex Water, after his rather harrowing year as chairman of the Water Services Association, has taken his company out of that association because he no longer wants to be tarnished and tormented by the scandalous record of most of the other companies, in particular North West Water and Yorkshire Water. The boss of Northumbrian Water has, of course, disappeared altogether—which brings me back to Yorkshire Water.
Yorkshire Water's record on leaks is the worst in the country, as is its record on practically everything else. Even before this year, it had 69,000 unplanned interruptions of supply compared with the next highest number of interruptions, which was the 32,000 imposed by Thames Water. However, those figures do not give the full flavour of Yorkshire Water's gross incompetence. It has shown that it is simply not up to the job. The people of Yorkshire know that, and so do the businesses in Yorkshire. I suspect that the bosses of Yorkshire Water know that it is not up to the job, hence the premature but unlamented departure of Gordon Jones, the chairman.
Yorkshire Water has been seeking drought orders to give it the right to abstract more water and cut off supplies to customers. After the most recent inquiry, the Government inspector said:
I listened to many experienced and qualified people on the likely effects of confirming this…order. These embrace such topics as health, emergency services, education, tourism and leisure, the implementation and operation of the Order, the effect on individuals, and particularly vulnerable members of society, and the implications for other primary legislation. One thing became clear. No-one felt able to predict with confidence or even appreciate the extent of the damage to the fabric of life and society if rota cuts were imposed. That public health would be threatened, education lost, employment opportunities denied, the vulnerable and public placed at increased risk and emergency services unable to fill their obligations were not matters of particular dispute.
Everybody present accepted that
the lack of quantities of potable water for even those uses such as hospitals, together with the individual needs of dialysis patients adds to the concern.
The Government inspector criticised Yorkshire Water not only for not knowing the answers to those questions, but for not having even addressed them before they were raised at the inquiry by the other people making representations. Having received the report, he eventually sent a letter to the Secretary of State on the matter. Despite that, the Secretary of State—ever complacent—has decided that because the drought order applications have been withdrawn for the winter,
it would serve no useful purpose to go further into these questions.
The only person who does not seem to realise that Yorkshire Water is not up to the job is the Secretary of State. At the outset, he praised the company, saying that it was deploying its expertise in China and north America—not a popular line in my native county. Yorkshire people seem to think that to live up to its name, Yorkshire Water must first and foremost deploy its expertise in ensuring that Yorkshire people get the water that they need and have paid for.

Mr. William O'Brien: May I advise my hon. Friend that there are still restrictions on the use of water in my constituency and the Yorkshire area even though the orders have been withdrawn? Those restrictions apply to all water users in certain areas, regardless of whether they have meters or not. So there is no advantage in this case of water metering.

Mr. Dobson: I certainly take note of that. In recent times anyway, the supply of water to people in Yorkshire has been restricted more often that it has not been restricted.

Mrs. Alice Mahon: Before my hon. Friend leaves the point about the Secretary of State's

complacency, may I ask him whether he is aware that the reservoirs supplying the Calder valley, Halifax and Kirklees are only one third full, even though they should be up to about 80 per cent. full at this time of year? Is he also aware that the £100 million that Yorkshire Water is belatedly going to spend on pipes is no long-term solution? We could be faced with exactly the same problem next summer. Nothing has changed, yet the Secretary of State does not seem to realise it.

Mr. Dobson: My hon. Friend, who together with my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson) has campaigned a great deal on this issue to the great benefit of the people of Yorkshire, makes exactly the point that I was about to make. Before I do so, I return to the question of Yorkshire folks and money. They want the services that they have paid for. They would like all that water that has been cleaned and shifted around the county and that is leaking away, and they would like it without having to pay anything extra for it.
The other thing that Yorkshire people do not like is seeing the money that they have paid for water being invested abroad, or in shopping malls in Leeds or refuse tips in Doncaster. They think that the money they pay should be spent on ensuring that Yorkshire people get water. That may be a rather old-fashioned point of view, but I certainly share it.
I warn the Secretary of State today that Yorkshire Water's problems seem far from over. There are still restrictions and, as my hon. Friend the Member for Halifax (Mrs. Mahon) has said, the reservoirs in Halifax and Bradford should be almost full at this time of year. At the moment some contain less than 30 per cent. of their full capacity. Next summer there could be even more serious trouble than last year, unless Yorkshire Water is forced to act. Clearly it will not take adequate action voluntarily.
In view of what has been happening in Yorkshire, my right hon. Friend and hon. Friends from Scotland are right to try to resist water privatisation there. In England and Wales we need a new system, with a water industry regulated effectively in the interests both of customers and of the environment. But we shall not get that until there is a Labour Government.

The Secretary of State for the Environment (Mr. John Gummer): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
welcomes the higher water quality, the improved standards of service to consumers, the increased availability of information and the increased exports which have been achieved as a result of substantially higher levels of investment and the removal from political control of the water industry through privatisation in England and Wales; looks forward to improved services in Scotland from the new public water authorities; and contrasts this with the arbitrary cuts from the investment plans of the nationalised water companies by the last Labour Government, including the six month moratorium on the letting of new construction contracts.".
We have now heard a great deal about Yorkshire Water, so it would be helpful to make some comparisons. We could look back to how the water industry was run before privatisation, and compare that with what happened afterwards.
Before privatisation, the water industry was starved of capital. It invested less than half the sum now being invested. When the hon. Member for Holborn and St. Pancras (Mr. Dobson) talks about leakage in Yorkshire, he is talking about pipes and infrastructure that Yorkshire Water inherited from the many years when the water industry was starved of capital. That happened not after privatisation but before, especially when there was a Labour Government.
When Mr. Healey had to turn round in his taxi and come back because Britain was in such a mess, what did he do? He cut the already ludicrously low investment in the water industry so much that there had to be a six-month moratorium, during which nothing was spent on water infrastructure. That is the story of water in the public sector.

Mr. Atkins: My right hon. Friend will recall that for a time I was the Minister responsible for water in Northern Ireland, where water is still in state ownership. One of the problems that confronted me was exactly the one that my right hon. Friend mentioned. During the 1970s there had been a moratorium on investment for some time. As a result, great sums needed to be invested, and if water was not to be privatised in Northern Ireland, because some concern had been expressed there, that money had to be found from somewhere by the taxpayer. The difference is that the privatised water companies can invest private sector money, whereas in Scotland and Northern Ireland the money still comes from the taxpayer.

Mr. Gummer: My right hon. Friend is right. One must consider exactly what the sums would be. As the water companies are investing twice as much as before privatisation, if a Labour Government were to find that money somewhere else they would have to find £1.5 billion. Would it come from the schools programme, or from some other aspect of government?
The Labour party must decide what it really means. If it wants investment, that can come only from the private sector; otherwise the money would have to be taken from other areas, and if Labour were in power it would find that impossible. The first question that we must ask the Labour party is: if it were in government, would it renationalise the water industry? I notice that the hon. Member for Holborn and St. Pancras did not answer that question. He has not been able to say, "Yes, we would renationalise" or "No, we would not renationalise."

Mr. Dobson: rose—

Mr. Gummer: Will the hon. Gentleman tell us which he would do?

Mr. Dobson: Since I took over this job I have said on innumerable occasions that, like most people in this country, I would rather like to take the water industry back into public ownership, but that the money to buy it back is not there, so we need a properly regulated system.

Mr. Gummer: rose—

Mr. Dobson: While I am on my feet, I shall ask the Secretary of State a question, if I may. May I remind him that it was not the Labour party that nationalised the water

industry in the first place? It was owned and operated successfully by our big cities and towns. The Tory party nationalised water in 1973—and the Secretary of State voted for that.
I have talked to my right hon. and noble Friend Lord Howell—then Denis Howell—about what happened next, and he tells me that he went to the Treasury—

Madam Deputy Speaker (Dame Janet Fookes): Order. I am sorry to interrupt the hon. Gentleman, but I would have stopped him by now if he were a Back Bencher as his intervention has been too long. What is good enough for Back Benchers should be good enough for Front Benchers.

Mr. Gummer: We now know where we are. The water industry would not be nationalised under Labour, but it would be regulated in such a way as it to make it unable to raise the investment necessary to do the job. The hon. Gentleman says that he would politicise the water industry so that it would be under the control of a Labour Government, but what does the leader of the Labour party say? He says clearly that Governments cannot run companies. That is true of the water industry, too.
The hon. Gentleman is offering the worst of every world. The industry would not be nationalised, but it would not be in private ownership either. It would not be able to raise money, and it would not be able to invest. It would not be able to replace pipes or stop leaks. It would not be able to offer higher standards, or do any of the other things that the hon. Gentleman knows must be done. The industry would be in real trouble because the hon. Gentleman would not he able to read the balance sheet to understand what was going on. When he explains how the finances work, it is clear that he cannot read a balance sheet. [Interruption.] The hon. Member for North-West Durham (Ms Armstrong) is leaving because she cannot read a balance sheet either, but she does not like to be told about it. It is not surprising for someone who cannot read a balance sheet to get the figures wrong.
Let us consider investment.

Mrs. Helen Jackson: Will the Secretary of State give way?

Mr. Gummer: I shall finish this point first.
In the years immediately after privatisation, investment was particularly high because it had been so low before privatisation. The rules of the European Union and the Government were such that they demanded immediate investment to meet bathing water directives—

Mr. Jimmy Wray: On a point of order, Madam Deputy Speaker. Earlier, Madam Speaker instructed hon. Members to speak into the microphone. The Secretary of State is not at the London Palladium, and we would like him to address the Opposition.

Madam Deputy Speaker: The hon. Gentleman is not quite right. The instruction was that all hon. Members should remember that they are addressing the occupant of the Chair.

Mr. Gummer: Thank you, Madam Deputy Speaker.
A considerable amount of investment was made to meet demands to improve water standards, some of which came from this Government and some from measures to which we had rightly agreed in the European Union. We have now met most of those demands, but a further £24 billion of investment is needed between now and 2005. Under the previous system, that investment would not have been made and we would not have been able to meet either our own requirements or those of the EU. We can meet them only because of the present high investment, which is twice as high in real terms as under Labour.

Mr. Nicholls: Will my right hon. Friend give way?

Mrs. Helen Jackson: Will the Secretary of State give way?

Mr. Gummer: I shall continue my argument.
It is a question of not just investment but of what happens if there is no investment. Without investment, we will have dirty beaches. Labour Members object to dirty beaches, but when we say that we must pay to get rid of the muck they do two things: first, they suggest that we do not have to pay for it, and, secondly, they pretend that it is not their fault that the beaches are so dirty. Treating problems with beaches in the south-west is costing so much because, under Labour, there was no investment, and raw sewage went into the sea.

Mr. John Gunnell: On a point of order, Madam Deputy Speaker. The Secretary of State has had his back to you for quite a long time—

Madam Deputy Speaker: Order. This matter can be left in my hands. I have noted when the Secretary of State's back has been turned to me, but it has not been for a long time. The right hon. Gentleman has swung about a little bit, and I take this opportunity to remind him that he must address me as the Deputy Speaker.

Mr. Gummer: I apologise for my natural athleticism, Madam Deputy Speaker, and I shall do my best to ensure that it is curbed.
The necessary investment would not occur under Labour, and it did not occur when the industry was in public ownership. Labour knows very well that it cannot suggest that the industry should be taken back into public ownership—not for the reason the hon. Member for Holborn and St. Pancras advanced but for a wholly different reason. It is because it would result in dirty beaches, lower-quality water and a failure to improve the infrastructure and to repair all leaks.

Mr. Nicholls: Will my right hon. Friend give way?

Mrs. Helen Jackson: Will the Secretary of State give way?

Mr. Gummer: I shall give way first to the hon. Lady, and then to my hon. Friend.

Mrs. Jackson: Is the Secretary of State really suggesting that there were no investment plans for the

water and sewerage industry before 1990? What credit does he give the countless people who served on and chaired water boards for nothing in the years before privatisation? Those people planned investment, read the balance sheets and understood every figure.

Mr. Gummer: Before privatisation, investment was half its present level and, under a Labour Government, it would stop entirely. Some of the hon. Lady's friends may have sat on water boards, for which I honour them. They will have seen what the balance sheets said and will know that a Labour Government will not provide the money. They also know that, under Labour, the money will be stopped altogether.

Mr. Nicholls: Will my right hon. Friend give way?

Mr. Richard Burden: Will the Secretary of State give way?

Mr. Gummer: I will not give way to the hon. Gentleman, as I have already said that I will give way to my hon. Friend the Member for Teignbridge (Mr. Nicholls).

Mr. Nicholls: Is my right hon. Friend aware that when the hon. Member for Holborn and St. Pancras (Mr. Dobson) was asked whether water charges would fall under Labour, he said, "Yes"? Therefore, the investment that is clearly still necessary will have to be raised from general taxation. The hon. Gentleman did not give me the opportunity to ask him by how much tax would have to go up under Labour, but perhaps he has already given that information to my right hon. Friend.

Mr. Gummer: The hon. Gentleman has not yet given that information to me, but I was coming to precisely that point. Labour says that the industry would not be renationalised, but that it would be put under political control and that prices would fall. Therefore, none of the investment that we are debating would be made—certainly not at current levels. Labour would decide whether one beach or another was cleaned up, and whether there would be leakage controls or not. It would make those decisions by pushing down prices and investment. The hon. Member for Holborn and St. Pancras has explained to us precisely why the Leader of the Opposition said that Governments cannot run companies; I would add only that Labour Governments cannot run anything.

Mr. George Robertson: Why must the Government privatise the water industry in England to get private investment, but not in Scotland, where the industry—which is not being privatised—is to raise private money? Why is it impossible to cap price increases in England, when the Secretary of State for Scotland has just capped the increase in water prices for next year at 6 per cent.?

Mr. Gummer: I am interested to hear that, because the price increase cap in England has been reduced from 4 per cent. to 1.4 per cent. The hon. Gentleman is wrong: it is perfectly possible for the regulator to reduce the cap for the privatised water companies. Labour is in favour of devolution, which evidently means that Scotland can do


something that England does not and vice versa. It seems perfectly reasonable for Scots to make their own decisions. All I can say is that in England, before privatisation, investment was half what it has been since. The sadness is that Labour thinks that there is something odd about that, although it will not pledge itself to renationalise the industry.

Mr. Burden: Will the Secretary of State give way?

Mr. Gummer: No, I will not give way to the hon. Gentleman.

Mr. Dobson: Will the Secretary of State give way?

Mr. Gummer: I will give way to the hon. Gentleman as he always puts his foot in it.

Mr. Dobson: Will the Secretary of State confirm figures from his Department and from Ofwat showing that, taking public and private ownership together, average investment in the five years of the previous Labour Government was the same as the average investment since this Government have been in power? Will he further confirm that investment under Labour during those five years was higher on average than when the industry was in public ownership under this Government? If he says no, he will be misleading the House. I wish to help him not to do so.

Mr. Gummer: I am interested that the hon. Gentlemen has to mix a period of public ownership with a period of private ownership to make his figures stand up. We are making a clear statement that, under Labour and Conservative Governments, public ownership meant lower investment than private ownership, and that, under a Labour Government, for six months public ownership meant no investment whatever. The Opposition cannot take that; they always have to find a situation in which privatisation can be blamed.
I noticed, for example, that recently the Opposition rushed to say that the privatised water companies in the north-east were responsible for the fact that between 50,000 and 75,000 people were without water because of burst pipes. They did not mention that many more people in Scotland and Northern Ireland, where there are no private water companies, suffered in that way. I am not blaming that on public ownership; I am merely saying that the Opposition will blame everything, includeing the cold weather, on privatisation.

Sir Michael Grylls: Will my right hon. Friend give way?

Mr. Gummer: I must move on, but I will come back to my hon. Friend in a moment.
The hon. Member for Holborn and St. Pancras spoke an awful lot about the water companies, but he did not answer the real questions. Those companies are now not only much more able to obtain investment but are much more efficient than they were. They are not efficient enough, but they are much more efficient than they were—those of us who are Members of Parliament in the Anglian Water region can see that from our postbags.

Since privatisation, the number of complaints about Anglian Water has fallen dramatically. The service is immensely better, and investment is considerably higher.
My constituency waited year after year under Labour and Conservative Governments to have sewage in Felixstowe properly treated. Felixstowe is a major holiday resort and we wanted to do something about our beaches. We now have a major sewage scheme because of privatisation, and we recognise that we pay the cost of that in our bills. We are prepared to do so because we want the quality. In fact, the scheme will not just reach the quality asked of us by the European Union—although we enthusiastically accept that—but that which we need to cater for holiday makers in our area.
We are also pleased that privatisation has been a success story abroad. Britain is now earning considerable wealth throughout the world because of the expertise of our water companies. [Interruption.] The hon. Member for Holborn and St. Pancras obviously thinks that that is very funny as he has given one of his inimitable giggles, but I am talking about hundreds of millions of pounds of money coming back and bringing wealth to this country.
We are now using our expertise in Malaysia, Mexico, Adelaide and Shanghai. Why? Because those countries see that our water companies are doing the job so much better than any others. There are only two countries in the world of which that can be said. The British and French are the only two countries whose water companies can command universal support for the work that they are doing at home, and therefore win contracts abroad. That must be good for the United Kingdom, but as usual the hon. Member for Holborn and St. Pancras and his friends attack the United Kingdom and try to destroy our major companies that are winning orders throughout the world.
It is surprising that the Opposition do that when one sees just how many of their friends invest in those companies. I have mentioned, although I know that it makes them uncomfortable, the position of the sponsoring union of the hon. Member for Holborn and St. Pancras.

Mr. Dobson: It does not make me uncomfortable.

Mr. Gummer: It may not, but it jolly well should. The hypocrisy of the hon. Gentleman would make me very uncomfortable. He says one thing and belongs to a union that is doing the opposite. If I was a Labour Member in Derbyshire, I would want to know what Derbyshire county council is doing and defending.

Mr. Dobson: Derbyshire county council's pensions board.

Mr. Gummer: Oh! The hon. Gentleman says that it is merely its pensions board. The chairman of the pensions board, a Labour councillor, explained that he did it because he thought it was best for the pensioners, and so it was. But the hon. Gentleman said that the company was ripping off the public for the benefit of its shareholders. That is hypocrisy—saying one thing and doing the other.

Mrs. Helen Jackson: Will the Secretary of State give way?

Mr. Gummer: No, I will not give way to the hon. Lady, and I will tell her why. I dissociate her from


the hypocrisy of her Front-Bench colleagues. She is an honourable woman on this matter. I disagree with her, but I have never found her to say one thing and do something else. That is the difference.

Mr. Dobson: Resign.

Mr. Gummer: The hon. Gentleman says that she ought to resign. Evidently, members of the Labour party must resign if they are not hypocritical. Now we understand. The hon. Gentleman has called on the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) to resign for lack of hypocrisy.

Mrs. Jackson: On a point of order, Madam Deputy Speaker. Is it in order for the Secretary of State to make comparisons of that nature in the House in a debate on such an important issue? He said that I am in some way more honourable that my hon. Friends on the Front Bench. That is an extraordinary thing to say.

Madam Deputy Speaker: The occupant of the Chair is not responsible for the utterances of hon. Members. All I would suggest is that the best standards prevail.

Mr. Gummer: Thank you, Madam Deputy Speaker. I am that sorry the hon. Member for Hillsborough took my comments amiss, because I have genuinely accepted—

Mrs. Jackson: Will the Secretary of State give way?

Mr. Gummer: No. I wish to dissociate her from what I have just said and I will give way to her later when we have moved well away from this subject.

Sir Michael Grylls: Will my right hon. Friend give way?

Mr. Gummer: No, I must move on, but I will come back to my hon. Friend, as I have promised.
Privatisation has a number of great advantages for the public. For a start, it ensures that the people who control and police the companies and set targets do not own the companies. When the water companies were nationalised, that is precisely what happened. The Government owned the companies and set the standards, so of course they did not set high standards because they did not have the money to meet them. The Government set the standards that they thought they could meet. Under privatisation, we set up an independent regulator to set standards.
During Environment questions earlier, the hon. Member for Wakefield (Mr. Hinchliffe) was very concerned about drinking water and he highlighted the need for very strict standards. I think that he was surprised to learn that there were no such standards before privatisation. When the companies were privatised, we set those standards and gave powers to the drinking water inspectorate to ensure that the standards were met. We also ensured that the National Rivers Authority had both the expertise and the duty to control those aspects of water production that were in its remit.

Mr. Dobson: The Secretary of State waited for the report.

Mr. Gummer: Yes, I waited for the NRA to produce its report. I would have looked rather silly if I had acted

before an independent advisory committee produced its report. I can guess who would have been the first person to demand why I had acted without the information from the NRA. The hon. Gentleman must be more sensible about the issues of control and setting standards.
The hon. Member for Holborn and St. Pancras made comments—rather surprisingly, I thought—about the independent regulator which would be very difficult to make outside the House without clearly bringing the regulator's reputation and independence into discussion. There is no doubt that the whole industry, and those outside it, know that the regulator seeks to do his job as effectively as possible. As a result, he has been able to reduce significantly the amounts by which the companies have been able to raise bills.

Mr. Michael Clapham: Will the Secretary of State give way?

Mr. Gummer: No, when I give way, I shall do so to my hon. Friend the Member for North-West Surrey (Sir M. Grylls). I wish to move on to the subject of profits.

Mr. Dobson: To the best of my knowledge, I have never said anything in this Chamber that I was not prepared to say outside. I do criticise the regulator. He has not done a good job on behalf of the customer—I will say so publicly and privately and I will continue to say so.

Mr. Gummer: I wonder whether the hon. Gentleman would be prepared to say outside what he clearly said in the House, which was that the regulator did not understand the figures. The hon. Gentleman said that he could not have understood them; otherwise, he would have done something different. That is a serious thing to say to a professional man who understands the figures, particularly when it comes from a man who does not understand them and never has, which leads me to the subject of profits.
The Labour party has been saying that the City would be safe with a Labour Government because the Labour party is new and has changed—it is not the same. Yet, when the Opposition talk about profit, we discover that they are precisely the same and have not changed at all. First, profits are bad. Secondly, the Opposition appear to have no idea that 40 per cent. of what they call profits are invested in the very infrastructure that they want to improve. They do not appear to understand that the profits also pay for investment. It is also true that, because of the profits, the companies are worth more and are able to borrow, so that the cost of present investment can be spread over the people who will benefit from those investments.
All those things are possible only if the companies make profits, but the Opposition do not like profits. They would regulate the industry so that there would not be any. If there were no profits, there would not be any investment.
As always, that brings us back to the fact that the Opposition want the investment but will never be prepared to pay the price. They know that investment is valuable and that is why their friends invest in the companies, but in the end they go back to the old Labour view of hating profits, and I will tell you, Madam Deputy Speaker, why. It is because the hon. Member for Holborn


and St. Pancras has never made a profit in his life. He has never created a job and has never been able to make the kind of wealth that is possible for people in Britain because of what the water industry has been able to achieve throughout the world. All he can do is cavil and complain.
Not every water company is good. Anglian is extremely good and has done very well indeed. Much of the work done by Thames Water is particularly good. That is why I am so pleased that the RMT has invested in it. As I drink Thames Water's product here, I am pleased with its quality. Some other water companies have done many extremely good things, but I would not have shared a public relations agency with Yorkshire Water in the past year. One or two things could have been put much better and I know that they will be because the water industry is in private hands.

Mrs. Elizabeth Peacock: Is my right hon. Friend aware that Yorkshire Water has invested and is investing a huge amount of money to rectify the difficult situation of the summer? It has also stated that it will not pass those costs to the consumer next year. Will he encourage the company not to pass the cost to the consumer the following year, as that is not clear?

Mr. Gummer: I thank my hon. Friend for that intervention. I shall certainly be keeping a close eye on Yorkshire Water. Although it has not starred as some other water companies, such as Anglian, have starred, there is no doubt that Yorkshire has been much better served by that company than by the nationalised industry. The company has invested and is investing and it is now subject to public control. Privatisation subjects companies to public control. If a company is owned by the public, they expect both the rate of investment and the rules.

Sir Michael Grylls: My right hon. Friend is doing the House a great service in unravelling the extraordinary tangled web of Labour's policy on the water industry. The more the Opposition try to explain it and my right hon. Friend unravels it, the clearer it becomes that orderly regulation, which is what we have, would be replaced, under Labour, with disorderly interference by ministerial fiat, which is what ruined so many of the nationalised industries and made them such failures.

Mr. Gummer: We should give some credit where it is due. The hon. Member for Holborn and St. Pancras, who speaks for the Labour party on these matters, once led Camden council, so he has experience of disorderly organisation. If there were someone who could run something with political abandon, the hon. Gentleman is that man. I just do not want my water to be in his hands. We will do much better with water in the hands of the professionals and with standards set independently by those who are able to set them without being concerned about the costs of implementation, apart from cost-effectiveness.

Mr. Burden: Will the right hon. Gentleman give way?

Mr. Gummer: I will not give way again as I want to get to the end of my speech. This is a short debate and I must say one or two more things that will help the hon. Member for Birmingham, Northfield (Mr. Burden) when he speaks.
First, I must thank the Opposition for this opportunity. Last year, not one of their Supply days was on the environment. They have no environmental policies and they did not raise a single environmental policy on the Floor of the House. That chimes with something else. I was pleased to answer Environment questions today, but we used to have an hour of questions—Environment is almost the largest Department in the Government and it had an hour for 25 years. To celebrate the 25th anniversary of the Department of the Environment, the Labour party asked whether we could have a shorter Question Time and whether it could be cut to 40 minutes. I wonder why. It is because the Opposition lose every time. Every time they ask a question, they get an answer and they do not like the answers. Every time they ask a question, they discover that they have got it wrong.
That is what the Opposition discovered today. They have had to admit, first, that they would not nationalise the water companies; secondly, that they would go in for political interference; thirdly, that they would not be able to provide the necessary investment; fourthly, that they would have water companies in which their friends would no longer want to invest; and, fifthly, that they do not understand the balance sheets of the water companies or of any other company. That is what the hon. Member for Holborn and St. Pancras has had to explain, and it is good that he has come to the House to give us this opportunity.
I ask the hon. Member for Holborn and St. Pancras to help us again. I hope that we can have a debate on housing on the next Opposition Supply day. I would like him to outline Labour policy on housing because we did not hear it yesterday. I also hope that we can debate environmental matters. I look forward to hearing his views of the ozone layer and how he would deal, were he ever in a position to do so, with the big international environmental issues.

Madam Deputy Speaker: Order. I hope that we can return to the subject in hand.

Mr. Gummer: Today, Madam Deputy Speaker, we have been allowed to speak only about water and the hon. Member for Holborn and St. Pancras has failed completely. He has shown that, under privatisation, we are investing twice as much in infrastructure and we have higher standards than ever before. This country has become the country to which other nations turn for advice on water and pay for the advice, which brings wealth to this nation. Under privatisation, water standards have risen as they never did before. We have been able to set standards, which never happened before. The hon. Gentleman shows that he is not fit to be part of a Government and that his party could not form a Government at any time.

Mr. Doug Hoyle: We have just seen a performance that would have been better at the Palladium than in the House of Commons. It is a great pity that the Secretary of State did not address himself to the motion.
I shall be brief, as many of my colleagues want to outline what has been happening with water in their areas. North West Water has its headquarters in Warrington, and my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), the Opposition Front-Bench spokesman,


was right to say that North West Water loses more water between the reservoir and the tap than any other company in Britain. I believe it to be the most inefficient water company, although it has to compete with Yorkshire Water. Each day, just over 158 million gallons of water leak away, or 109,871 gallons a minute. If that leakage was stopped, 5,528,077 consumers could be supplied. That is the scale of the company's inefficiency.
Despite the company's inefficiency, profits and dividends have gone through the roof since privatisation. Annual profits in 1990–91 were £215 million; in 1994–95, they were up by 32 per cent. to £284 million—or £540 per minute. My hon. Friend the Member for Holborn and St. Pancras mentioned that over the past five years, it has spent only £8 million on trying to reduce leaks. It is boasting that it will do something about them, yet even now it will spend only £65 million a year on reducing leaks. The modest target that it has set itself is to reduce leaks by the year 2000 from 30 to 24 per cent. By the year 2000, 24 per cent. of the north-west's water will still be flowing away in leaks.
The cost of delivering water in the north-west has gone up by 21 per cent. since 1992. One would think that the people responsible for that sad state of affairs would be sacked. Not a bit of it. Instead of being sacked, they have been feathering their nests. The company has been a seat of power for the fat cats.
Let us examine what has happened to the chairman of North West Water. In 1989–90, when the company was in public hands, he was paid £47,000 a year, and that is far too much. The same chairman, Dennis Grove, in the year before privatisation pushed up his salary to £97,000 a year, again far too much for the job that he was doing. It contrasts with the people who, when the industry was in public hands, gave their services for nothing. However, that is nothing compared with Sir Desmond Pitcher, who has pushed his salary up in 1994–95 to £360,000 a year—an increase of more than 300 per cent.—at the same time as the company is being run so inefficiently.
There is also the case of the former chief executive, Bob Thian, who was paid £1 million to leave the company. I see that the Secretary of State has left the Chamber.

Mr. Gummer: indicated dissent.

Mr. Hoyle: I had not noticed the right hon. Gentleman. I apologise.
The right hon. Gentleman boasts that the water companies are going for contracts all over the world—in Argentina and Australia. That was certainly true of North West Water. However, those companies are doing nothing about the sad state of affairs in which water is leaking away at home and there is nothing for the benefit of people in the north-west.
The same chief executive not only initiated that mistaken policy, but was the person responsible for the installation in the new head offices in Warrington of a computer that has cost millions of pounds and been difficult to get right. What did he get when he left the company? He got £1 million in compensation for all the mistakes that he had made. We never heard any

condemnation of those people from the Secretary of State. All we had was the knockabout stand-up comic act that we have had from him before.
We can contrast the £1 million that was paid to Mr. Thian with the redundancy money paid to the thousands of staff who lost their jobs to keep up profits and pay the salaries of the fat cats at the top. Because of their inefficiency and the way in which they have allowed water to leak away in the north-west—we admit that last summer was a dry one, but it followed one of the wettest winters that we have ever had—we had a hosepipe ban last summer in most of the region. They also decided, at the height of the driest summer for many years and despite the drought, to empty three reservoirs in the north of the region. When there was a public outcry about that, they emptied only one reservoir—Poaka Beck in Cumbria. How stupid to empty a reservoir at the height of a drought to undertake maintenance. That is the sort crazy thing that happened.
Even worse, the highly inefficient North West Water was allowed to take over Norweb, the region's electricity company, against advice from even the weak regulators in the electricity and water industries. Their advice was ignored. I was one among many who wrote to the President of the Board of Trade to ask him to refer that to the Monopolies and Mergers Commission. He did nothing about it and the merger was allowed. We in the region are paying a high price for that.
The company is now called United Utilities, but it is really North West Water because most of the directors of Norweb left. I need not say that they did not leave empty-handed but with handsome pay-offs. A subsidiary called Vertex was set up to run telesales, customer services, meter reading and billing. Again, thousands of jobs will be lost.
To push the job losses through, the company is going to derecognise the trade unions, when industrial relations in both the water and electricity industries have been very good. Recognition will be removed, so that thousands of people can lose their jobs. When they lose their jobs—and those employees have served both companies faithfully and well for many years—they will not get the £1 million that was paid to Mr. Thian or the handsome pay-offs given to the directors of Norweb. That shows the stupidity of not referring the matter to the MMC. It has put at risk not only the jobs of employees but the interests of consumers. It was a great blunder to put an inefficient company, with its present chairman, Sir Desmond Pitcher, in charge not only of water, but of electricity.
A monopoly is being created in the north-west. Consumers cannot move from using North West Water or the electricity that is now supplied by the same company. It is an inadequately regulated monopoly. When we come to power, we must give attention to that and ensure that both those industries are properly regulated, in the interests of consumers and of the people who work in them.

Mr. Patrick Nicholls: I also welcome the fact that the Opposition have been kind enough, and, perhaps, candid enough, to have a debate on this subject. I look forward to other Opposition Supply days when we can debate education, defence and taxation, so that we can explore across the range the difference between what the Labour party says and what it does.
Ministers will not be surprised to hear me talking about water again. As a west country Member, I must have talked more about that subject than about any other since 1990. I shall look back at what has caused some of the water problems in the west country over the past six years or so and suggest one or two amendments.
I have sometimes heard it said that South West Water has invested millions, if not billions, of pounds on cleaning up the waters around the west country. That is somewhat loose language. Millions, if not billions, have certainly been invested, but that investment has been made by the water charge payers in the south-west. It is the fault of nobody in the House that the European Community decided to identify 455 sub-standard beaches in the United Kingdom and that 30 per cent. of those were in south-west England. The south-west has a relatively small population, many of whom are of retirement or near-retirement age, so it is bizarre that a relatively small number of relatively impoverished people found themselves responsible for cleaning up 30 per cent. of the nation's coastline. That clean-up was done and financed—painfully—by the people of the south-west. The fact that it had to be done is neither here nor there.

Mr. Matthew Taylor: Unlike the Secretary of State, the hon. Gentleman has attempted to blame the European Union for the directives on cleaning up our beaches, yet the British Government had adopted the regulations of the urban waste water directive before they were adopted by the European Community.

Mr. Nicholls: The hon. Gentleman speaks as a representative of the most "federast" party in the United Kingdom.

Mr. Taylor: indicated dissent.

Mr. Nicholls: The hon. Gentleman shakes his head. He should go away and read some of his party's literature. The Liberal party does not have a firm policy on much, but it has a very firm policy on complete and total integration into the European Community. I agree that, at times, the Government have found themselves being moved at a pace and in a manner that I would not choose, but it is a direct consequence of having to play our part in the European Community. The only party in the House that has always been consistently pro-European, and is therefore not in a position to make that point, is the Liberal Democrat party. If it were ever to play a part in the government of this country, there would be no question of trying to negotiate with our European partners on directives and other such matters. It would simply be told when to jump and the only question that it could ask would be, "How high?"
South West Water plc has sometimes been criticised, not because it has had to clean up the coastline in that way, but because of the thoroughly insensitive way in which it has been done. There was a time when my postbag was full of letters complaining about the hike in water charges in the south-west. I pay tribute to South West Water for the courtesy and attention with which it has always dealt with my queries, but it was insensitive to how people in the west country felt about price rises. On one glorious occasion, the chairman of South West Water gave an interview in the Western Morning News to the effect that people in the west country were well off

and therefore able to pay. That judgment must have been framed by the fact that he had been looking in the mirror at the time. Some people in the south-west are paid a great deal of money and can therefore take that attitude to water charges.
If hon. Members think that I am being slightly unfair to South West Water, I shall make a further point. As a result of efforts made by west country Members of Parliament and Ministers—I pay full tribute to my right hon. Friend the Member for South Ribble (Mr. Atkins)—the regulator imposed a regime on South West Water, which meant that charges were capped at approximately the rate of inflation. That should have been the subject of great rejoicing in the west country, but South West Water immediately announced that it could not fulfil its statutory functions if its charges were pegged in that way, and it appealed. It took a whole year for the appeals procedure to go through.
I have never been able to get to the bottom of the fact that South West Water paid about £1 million to present a case to the Monopolies and Mergers Commission showing that it simply could not manage on the moneys that it had. In a sense, that was correct and, ultimately, the MMC varied its position slightly. It said that, on some relatively minor aspects, the regulator had been too generous to South West Water and it imposed a slightly tighter regime on South West Water. There is no longer talk of South West Water being unable to carry out its statutory functions.
People in the south-west are still faced with extremely high combined water and sewerage payments, but at least when they look into the future, they no longer see stretching before them extremely high year-on-year increases. That has been brought about not by the efforts of South West Water, but by the combined pressure of west country Members of Parliament and Ministers.
That is the recent history of why this subject matters so much to people in the west country. Another reason why this debate is so important is that politics is about choices. When deciding which party to vote for, most people make the decision not because they think that one party is perfect and another is not, but on the balance of choice. They compare the parties' policies. Some people are probably saying, "We know what the Conservatives' position is on this; let us see what the Labour party has to offer us." They could do worse than look at the motion that the Labour party has tabled today. It is splendid stuff, with marvellously volcanic phrases about
the deplorable record of the privatised water companies".
It goes on to talk about
prices, profits…pay and perks".
If those marvellous alliterations do not get one salivating sufficiently, one can look at today's press wire, where the Labour party makes a great attack on water companies. One might reasonably think that, if the Labour party were to get into office, it would immediately put those fat cats to the sword and do away with all the profits. The difficulty is that one must always compare what the Labour party says with what it does.
It is interesting to see what the Labour party does when it is in power. Labour local authorities, such as Islington in north London, Nottinghamshire and Derbyshire, have all acquired substantial shareholdings in water companies and other privatised utilities. The leader of the Labour


party lives in Islington, although he does not send his children to school there. Islington council has shares in 17 privatised firms and last year it bought £240 million-worth of pension funds and 24,700 shares in R. J. Budge (Mining). That name should make Labour Members shudder as if someone had trodden on their graves, because last year that company took over most of Britain's coal mines. That is the sort of company that Labour councillors are more than happy to invest in.
Not all Labour Members are happy about that. Some realise that there may be a slight contradiction between their principles and their practices. I pay tribute to the hon. Member for Nottingham, South (Mr. Simpson)— I am sorry that he is not here today—who said:
The party is skewered if we buy shares, having attacked privatisation, and then just sit back and accept the cash.
That is a marvellous thing to have said, although the hon. Gentleman will not say it here today as he will have been sandbagged outside.
Let us see what has happened at Labour party conferences when the utilities have been debated. In 1994, a splendid motion was put down by the Labour party in Amber Valley, where people know a bit about privatisation and the iniquity of water supplies, because Derbyshire county council has a £700 million pension fund with 800,000 shares in water firms.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) was kind enough to mention the plight of the south-west. He might have drawn to the House's attention the fact that Derbyshire county council owns 500,000 shares in North West Water and 300,000 in South West Water.

Mr. Jack Thompson: Will the hon. Gentleman give way?

Mr. Nicholls: I shall give way to the hon. Gentleman, but he must be patient.
We need not fear or doubt that the next Labour Government will keep the water companies privatised. You must be joking—the Labour party nearly owns the water industry already.

Mr. Thompson: I am not sure whether the hon. Gentleman has had any experience in local government; I assume that he has at some time in his career. He may be aware—I certainly am—that local government investment in pension funds is strictly controlled. I was chairman of the investment panel of Northumberland county council in 1981, at a time when I did not want pension fund money to be invested in South Africa. We were not permitted to refuse to invest there; we were obliged to invest in South Africa. Similarly, now, local authorities must invest in companies that they are advised give the best return. They have no choice.

Mr. Nicholls: I am grateful to the hon. Gentleman for putting it in that way. I do have experience in local government and I am also a lawyer. If the hon. Gentleman is seriously suggesting that those poor Labour-controlled authorities were bullied, or pressurised by law, into investing in companies that they describe as indulging in excess profits, rip-offs and so on, I reply that those

Labour, left-wing-controlled authorities were able to exercise a choice. They did exercise a choice and, as is so often the case with the Labour party, they exercised a choice in one direction and then preached an entirely different message.

Mrs. Helen Jackson: I wonder whether the hon. Gentleman would be interested to know of the way in which Yorkshire Water—I believe, on the advice and suggestion of the regulator and possibly the Government—treated local authority pension fund shareholders and individual shareholders. When those shareholders went to an annual general meeting to express their point of view, which was their right as shareholders, they were treated with the utmost contempt. Their points of view were not even allowed to be heard and considered properly by that meeting. That is the way in which water companies treat shareholders when they do not agree with the policy of the water company.

Mr. Nicholls: I accept that, if the hon. Lady or I were to buy a share in a water company and attend an annual general meeting to try to make an argument or gather people on our side, it would be extremely difficult—even with the combined megaphone diplomacy of the hon. Lady and me—to argue our point.
However, we are not discussing poor, humble little hon. Members with one share apiece. Large, Labour-controlled local authorities do not buy only the occasional share. They buy 300,000 shares in South West Water or 500,000 shares in North West Water, or are prepared to invest in a company such as R. J. Budge (Mining), which has committed what one would suppose to be the ultimate heresy for the Labour party, of buying up the privatised coal industry. If the hon. Lady wants to consider that, she should have a word with the hon. Member for Nottingham, South, who said:
The party is skewered if we buy shares, having attacked privatisation, and then just sit back and accept the cash.
I had hoped that the debate would enable my constituents to make a choice. I had hoped that they would be able to listen to the hon. Member for Holborn and St. Pancras and suddenly understand that an alternative might exist. What alternative was mentioned? None at all. Did we hear from the hon. Gentleman whether, under a Labour Government, the water industry would contribute less to environmental protection? Not a word. Would water charges be less? Oh yes, you bet they would, Madam Deputy Speaker, but where was the money coming from? The hon. Gentleman did not know.
Judging by the number of people in the Gallery and the number of people in the Chamber, it might be supposed that the subject of the debate is not desperately exciting. It might be supposed that the debate will not yield facts that would be useful for a hypocrisy watch. It might be supposed that the debate is uninteresting compared with some of our recent debates about education matters.
But as you know, Madam Deputy Speaker, there are universal principles. One of them is that one must be tough on cant and tough on the causes of cant. The debate is worth listening to, if only for one reason. If the Government ever decided to introduce a new charter mark, they might do a great deal worse than to introduce a charter mark on hypocrisy; and in deciding who would be a worthy recipient of that award, they might take a look at the Opposition Benches.

Mr. Matthew Taylor: The contributions to the debate bear out my suspicion that there is not much agreement across the Floor of the House. I hope that, in spite of that, there can be general agreement on the principle that access to an affordable, available and adequate source of water is one of the bases of a civilised society. I believe that the Conservative Government's privatisation of the water industry, and the way in which they have failed to regulate it adequately, have placed that in jeopardy. Water privatisation and the regulatory system have failed to provide an equitable and affordable deal for consumers in terms of costs, water provision and the environment.
I shall discuss three aspects; first, the rosy picture painted by Conservative Ministers at the time of water privatisation; secondly, the way in which the regulatory system has placed private interests before the interests of the consumer, creating a huge and unaffordable burden for domestic water users and for the environment; finally, the ways in which the Government can start to tackle the problems caused by water privatisation.
At the time of privatisation—as now—Conservative Ministers emphasised that they believed that privatisation was the best way to proceed. They argued that privatisation would give water companies a chance to raise capital in the market place, which the companies would invest in revitalising the water system and improving the environment while providing an affordable service. In reality, the monster that the Government created was what the National Consumer Council has described as
a monopoly supplier of an essential service to a captive market.
I expressed that anxiety during the debate on privatisation, when I argued:
I do not believe that privatisation is best for the water industry. Also, one must consider whether, in privatising, one is giving adequate power to consumers and meeting environmental concerns. In any privatisation, the first consideration should be the ordinary men and women of this country, whereas the Government's primary consideration has been maximising the return to the Treasury"— [Official Report, 8 December 1988; Vol. 143, c. 534.].
The Government cannot argue, therefore, that the problems could not be predicted. On the contrary, Liberal Democrat anxieties have proved well founded. The regulatory system has shown itself to be incapable of adequately protecting the consumer. In practice, water privatisation has meant that the consumer has suffered while the private water companies, their bosses and their shareholders have flourished.
Instead of raising capital for investment in the marketplace, the water companies have raised prices, forcing the consumer to pay a large proportion of the costs of investment in infrastructure and the environment. According to the National Consumer Council, domestic water bills have increased on average by two-thirds since privatisation, while profits accumulated by the water companies have increased by 20 per cent. a year from 1989–90 to 1992–93, and shareholders have made huge and increasing returns.
That is obviously inequitable, and it is one of the fundamental factors that the Secretary of State failed to address in his claim that privatisation gave the water companies access to what he described as private finance, but which the hon. Member for Teignbridge

(Mr. Nicholls) more accurately described as consumers' pockets. The water companies have not primarily relied on raising capital by means of, for example, further share issues, which would have diluted the return to the owners and managers of those companies; they have primarily relied on raising money from the revenue stream—direct from their captive consumers. The Government cannot argue that those problems could not have been predicted.
The regulatory system has obviously failed in that regard. If the industry had been priced and regulated properly, those problems might have been kept under greater control. Indeed, water prices could and should have been kept significantly lower if the Government and the regulator had demanded that capital should be raised for investment, instead of customers being used as a source of direct revenue.
Why did Ministers not ensure that stronger action was taken on that? Presumably, they failed to do so in order to protect the returns of the large institutional shareholders who, when they bought into the privatisation, were given assurances on rates of return.
The result of that weak regulatory system has been an increasing and unaffordable burden on water consumers—a burden that Conservative Ministers have failed to cut even if the rate of increase has been reduced in the past couple of years from what it was previously under privatisation.
The burden of paying for water has fallen particularly heavily on low-income families, pensioners and those who live alone. Using Ofwat figures, the National Consumer Council calculated that a household on income support would spend 3.2 per cent. of its disposable income on water in 1994–95, compared with 2.5 per cent. in 1989–90. The burden has increased for those who are least able to afford it.
In my part of the south-west, the burden is even more apparent. People in Cornwall and Devon are paying the highest water bills in the country. The average bill is more than £300 and many are paying bills of £600 or more. A pensioner living alone in the south-west may spend more than 9 per cent. of his or her income on water bills. Bill Fraser, the managing director of South West Water, announced his retirement yesterday. I hope that, with a change in leadership, the company will also take a change in direction and step up the pressure on Government to tackle the problem rather than relying on consumer payments.

Mr. Nicholls: The hon. Gentleman is a fair man, so I hope that he will make it clear in his speech that there was no painless way of raising money to do what had to be done. Whatever we may think about the way in which it was done, it is misleading to suggest that there was a painless way of doing it.
I hope that the hon. Gentleman is not seriously trying to suggest that it was not the combined efforts of west country Members of Parliament and Ministers who were prepared to take our side that persuaded the regulator that charges should be pegged. That was no mean achievement, bearing in mind that many of the hon. Gentleman's supporters did not believe that charges could be pegged, let alone reduced.

Mr. Taylor: The hon. Gentleman is correct in one respect: political pressure counts. The Government are


aware of the pressure that they are under in the west country as a result of the increasing water bills and they expect to lose seats as a consequence. That political pressure—which is echoed in Conservative Members' concern that they will lose their seats at the same time as the pressure is intensified by Liberal Democrats who expect to gain those seats—clearly had an impact on the Minister.
Prior to the preparations for privatisation, the cost of cleaning up our coastline was spread across the country—however inadequately—through an equalisation scheme, which relates to the point that the hon. Member for Teignbridge raised. Privatisation imposed a huge extra burden on the people of the south-west who were required to pay for a greatly expanded clean-up without any proper system to distribute the costs—some 3 per cent. of the population were left to pay for cleaning up 33 per cent. of the nation's beaches. A national asset became a regional burden.
That cost was emphasised last year by the chair of the South West Water consumers committee, who said that if the cost of environmental improvements—they are future improvements which are not yet in the pipeline—continues to fall solely on South West Water consumers, it will add £150 per year to their average bill. However, if the cost of the same clean-up were spread nationally and if everyone paid a fair portion of the cost of the national clean-up programme, it would add just £15 to the average bill.

Mr. Atkins: The hon. Gentleman advanced that argument in debate on the Environment Bill in Committee. I asked him then—and I do so again now—how his right hon. and hon. Friends who represent seats in other parts of the country, such as the erstwhile Treasury spokesman, the right hon. Member for Berwick-upon-Tweed (Mr. Beith), would feel about inviting their constituents to pay more in order to clean up the beaches in the hon. Gentleman's constituency?

Mr. Taylor: The short answer is that it is party policy. It is not difficult to argue that we should have clean beaches and clean water if it adds £15 to people's bills across the nation. It is more difficult to say the same thing to consumers in the south-west while adding £150 to their water bills. I would find it easier to argue the case for a £15 increase in Yorkshire than the hon. Gentleman would to argue the case for a £150 increase in the south-west. [Interruption.] If that is what the hon. Member for Teignbridge believes, that message will be relayed to all of his constituents come the general election.
The Government cannot argue that there is no precedent for sharing the burdens. Indeed, the green dowry explicitly recognised the need to spread the cost of the clean-up. However, the levels were set far too low before the environment regulations were finally agreed, and they were never increased in response to the Government's decision to raise environmental standards. As I said earlier, the decision on environmental standards was taken by the British Government in advance of the European Community determination.
The burden that the decisions have placed on the consumer is highlighted by the number of water disconnections. Higher water charges increase the

likelihood of disconnection for low income families. With that in mind, at the time of privatisation I sought a guarantee from the Minister that the 9,000 disconnections of the previous year would not be increased after privatisation. Unfortunately, the number of disconnections has increased. According to a study by the British Medical Association, there was a 48 per cent. increase in the number of domestic water disconnections between 1989 and 1994—little wonder, in view of the increasing bills that I have outlined.
More worrying still is the fact that the number of disconnections may rise if plans to encourage budget metering go ahead. Low-income families with cards or keys for meters who cannot afford to charge them up will effectively disconnect themselves. Those disconnections will not show up in the official figures, and therefore will remain unaddressed. There will certainly be no room for the existing customer protection measures. I cannot accept that there is a need for those disconnections, when it was shown that there was no need for them in Scotland.
I cannot forgive the fact that, in full knowledge of the burden on consumers that I have described, the Government have failed to reassess the charging system for water—despite having an opportunity to do so only six months ago. In an extraordinary decision last Easter, Ministers announced that charging for water would continue to be based on the outdated rates system. That system was abandoned for local government in the 1980s' as it was considered outmoded and unfair and based on valuations made in the 1970s. If it was considered unfair and outdated for use by councils in the 1980s, it cannot be acceptable for water charging by private companies in the 1990s. How can Ministers justify charges in the next century based on valuations from the 1970s?
In addition, the valuations bring with them a system which, despite the rising prices that I have mentioned, gives no relief to those on the lowest incomes or those who live alone. That means that in high charging areas such as the south-west there is no help for people who are literally unable to pay their water bills. I remind the House that pensioners in my region may spend 9 per cent. of their annual pension paying their water bills.
Despite that situation, Conservative Ministers have continued to disclaim any responsibility. In a letter to south-west Liberal Democrat Members of Parliament, the Secretary of State argued:
responsibility for water charges rests with the Director General of Water Services".
Yet Mr. Byatt confirmed in the Western Morning News that price limits were based on environmental obligations laid down by the Government and that he had little room to manoeuvre.
In addition to announcing that water bills would continue to be based on the rates system for the time being, Ministers argue in favour of introducing compulsory water metering as a new system of charging. I shall turn briefly to that issue. Metering creates huge problems for families on low incomes, as revealed by a recent Save the Children report entitled, "Water tight. The impact of water metering on low income families". Families with children are most likely to use more water for basic needs, and therefore have higher water bills. According to the report, under metering, families face huge pressure to cut their water bills and they try to save money by


sharing baths, taking fewer baths or showers, washing clothes less often and flushing the toilet less".
We have reached a worrying situation when a respondent to the Save the Children survey can say:
You have to bath the kids, but some people are afraid to bath them as it costs too much".
Imagine what it will mean in the south-west, where families face higher than average bills under compulsory metering. Extra environmental burdens are to be imposed upon them and the water companies continue to take their ever-increasing cut. The risks posed to those families by cutting water use is not imagined or exaggerated. The British Medical Association has said that families who economise on water over a long period are at risk from a number of diseases.
Water metering has its advantages, but Ministers must not contemplate it without the Government's first addressing the needs of the poor and the huge extra cost of introducing a compulsory system for every household. The Government do not answer those questions; they simply hope to blame the privatised companies for problems which they cannot bring themselves even to acknowledge. Meanwhile, the Government continue with the existing out-of-date, unfair rating system.
Having set out my concerns about the charging system for water and the need for more effective regulation, let me consider for a moment last summer's drought and its environmental implications. The water companies emphasise the need for domestic water users to cut consumption. Although that is desirable, it is not the main issue. A report by the Parliamentary Office of Science and Technology points out that leakage from water company distribution pipes remains more than four times higher than that from customers' supply pipes. That backs up figures from the Royal Society for the Protection of Birds that 500,000 gallons of water are lost through leakage every minute of the day. The combination of rising demand and leakage is putting huge pressure on our rivers and wildlife. Before we discuss cutting the amount of water that families use, let us cut the amount that water companies waste.
Since the summer, water companies have committed themselves to an accelerated leakage control programme which will double the current rate of improvement, but as the current rate is only 1.2 per cent. per year it will be too little and too slow. The Secretary of State for the Environment has simply accepted the water companies' argument that that is the most efficient approach, leaving the water companies to take measures to minimise their total costs, including those of leakage, under the regulatory system. That may well be the best answer for shareholders, but it is unlikely to be the best answer for customers suffering water shortages or for an environment that is literally drying up.
I come now to the measures that the Liberal Democrats believe would solve the problems facing water consumers and the environment. We have repeatedly proposed long-term and transitional solutions to cut bills and help consumers.
It is widely understood that Environment Ministers accepted that the burden fell too hard on the south-west and asked the Treasury for more resources, but the Treasury turned them down. Frankly, the only reasonable solution is fairer national distribution of the burden of the clean-up. It is not viable for the present system to

continue. It is certainly not viable to seek continuing increases in the context of the present charging system, which offers no help to the poor or those living alone.
Increased national investment would ensure that environmental improvements could be made without the burden falling unfairly on people in particular parts of the country. Our coastline is a national asset. It must be part of a national policy, not neglected as a regional problem.

Mr. Paul Tyler: Does my hon. Friend accept that if that were the case, there would also be an opportunity to draw down funds from the European Union as other countries do?

Mr. Taylor: That is right. When the industry was privatised, I said that privatisation would block much of the potential European funding that is available to the public sector, but not to private companies.
It is significant that neither Conservative Members nor Labour Front Bench spokesmen are willing to take action for my region. They all want to protect their voters outside the south-west. Let me remind the House that if the burden of the next round of environmental clean-up is distributed unfairly, as at present, it will add £150 to the average bill in the south-west. Yet if it is distributed evenly across the country, it will add just £15. That change will have to be made. Conservative and Labour must recognise that people in the south-west cannot afford to pay their bills.
In addition, we could help poorer customers right away by replacing the old rateable value system as the basis for charging for water with the up-to-date council tax system. That more modern system would allow the Government to help low-income families and those living alone who are faced with unaffordable water bills. Disconnections from water supplies should be illegal, as they are in Scotland. There are many ways to get money out of people. We do not need to deny their children water.
Both those moves should be combined with a tougher regulatory system. At present there is no way of penalising water companies for failing to meet agreed standards of service. Such penalties would encourage companies to raise their standards. Water companies must be encouraged to raise more funds for investment through private sector capital finance rather than directly from customers. Finally, to address the problem of future droughts and leakages, the Government must bite the bullet and introduce mandatory leakage targets.
It is time that the Government put a fair deal for consumers above protecting the water bosses and their shareholders. If not, in the south-west in particular, the Government's time will soon be up.

Sir Donald Thompson: I shall not follow the hon. Member for Truro (Mr. Taylor) to the south-west, where he expects my constituents to pay £15 a head to re-elect him. We have to look after our own beaches in Yorkshire.
I have received more correspondence on this subject than I have on the community charge and the Child Support Agency put together. All summer, correspondence about Yorkshire Water rolled into my office. The Calder Valley, Halifax, Bradford and the old


woollen areas were always self-sufficient in water. The waterways, the reservoirs and people's houses were supplied by the system that was established by the woollen manufacturers. Consequently, we have no national grid and no way of fetching water into my constituency other than its falling from heaven. Yorkshire Water's predecessors must have known that for generations; yet they did nothing about it.
I am convinced that, had there still been a nationalised industry or a water board industry, we would have been in the same position as 15 or 20 years ago, when we relied on standpipes. It did not come to that; none the less, Yorkshire Water was slow to spot the difficulties and abysmally slow with its public relations. It did not even attempt to bring water to west Yorkshire by other methods. At one time there was a call for Yorkshire Water to use the Army. It could also have asked the oil companies and other corporations that are accustomed to moving liquids for assistance. Ultimately, it had to resort to tankering and I am grateful for that.
The response to people who objected to the tankers roaring past their homes was as insensitive as it was to my constituents, to industry, and to various parts of the community throughout the crisis. Dentists, for instance, faced special difficulties. Their premises are often in residential streets where the water was cut off. They found the prospect of rota cuts on alternate days terrifying, not simply because there would not be water on alternate days, but because on those days when water could be delivered, it would have to be boiled. That possibility was averted, but not without having the effect of terrifying firms which were encouraged, not very subtly, to manufacture elsewhere, or old people, who were worried.
Yorkshire Water put up the backs of the people who wanted to help. My constituents are renowned for their common sense. They sent me here, so they must have common sense. They knew that it had not rained all summer and they would have helped Yorkshire Water. Eventually, they must have been tempted to leave the taps running on purpose, although they did not do so because they had too much common sense. Yorkshire Water threw away every chance of good public relations time after time.
The only time the chairman of Yorkshire Water wrote directly and unprompted to me was when I asked a question in the House and it was reported in the Financial Times the following day. That put a rocket under the chairman, but letters from my constituents seemed not to stir Yorkshire Water. The chairman of Yorkshire Water and I had clashed before. In years gone by, he had an untidy site at a place that my constituents know as Lowfields, which is now an industrial estate. I had to use the procedures of the House to make him relinquish Lowfields and bring it back into proper use.
Yorkshire people know that they can get nothing for nothing. They want Yorkshire Water to make a profit, but they are disgusted that the company should retreat first into the unregulated areas of its business before putting right all the damage and neglect that had occurred before privatisation.
The Government could not at first believe that Yorkshire Water could be so slow or so insensitive and pedantic towards its customers. We must help Yorkshire Water to regain the confidence of consumers, including

my constituents and business generally. If we are to have the investment that has been urged, Yorkshire Water must regain the confidence of the City. As things stand, I do not believe that anyone in the City would say, "It is a good bet to put your money on Yorkshire Water." Unless it attracts investors, my constituents will be badly served.
The problem will be back with us next year. It is not Yorkshire Water's fault, of course, that it has not rained. Similarly, it is not the Government's fault that the reservoirs are not filling at the usual rate. But that means that the problem will return next year. Accordingly, the Government must maintain pressure on Yorkshire Water. They must keep pushing. On behalf of our constituents, we must nag the Government as well as Yorkshire Water and its directors. We must ensure that the company recognises that the mistakes of last year are not repeated this year.

Mrs. Alice Mahon: Last year, when it became obvious to everyone in West Yorkshire, apart from those holed up at Yorkshire Water's headquarters and perhaps Ministers, that we were faced with almost certain cut-offs if appropriate action was not taken, I wrote to the Prime Minister. I did so in August. I wrote also to the Secretaries of State for the Environment and for Health. I asked for intervention and help.
The Prime Minister took five weeks to reply. When the Secretary of State for the Environment replied, he tried to defend the indefensible. The Secretary of State for Health adopted a similar approach. It was left to the people—I concede what the hon. Member for Calder Valley (Sir D. Thompson) said—and to local Members, local authorities and interested bodies to do all the shouting and pressurising. The Government abandoned us.
The water industry should never have been privatised. We know that water is vital to life. The privatisation of the industry has been a spectacular failure by any measure, especially in Yorkshire.
We hear much about hypocrisy these days. The hon. Member for Teignbridge (Mr. Nicholls) has been chided by some of my hon. Friends for being two-faced, but I think that he has 10 faces. He was one of the many Tory Members who wandered enthusiastically into the Government Lobby to support the Government throughout consideration of the privatisation Bill. At that stage, Labour Members were warning of disasters. If we are talking about hypocrisy and double standards, the hon. Gentleman provides a classic example.
On 9 January, Yorkshire Water announced that tankering would cease. No one was more pleased than hundreds of my constituents who lives had been seriously disrupted by the 24-hour operation. Janet Parsons, the secretary of the pensioners' association in Halifax, has been a doughty campaigner to keep the taps flowing. Janet told me that when she saw the tankers driving through narrow roads, up hills and in difficult areas in Halifax with "Water for Halifax" written on them, she thought that that was not life in a first-world country; she told me that it was like being in the third world, somewhere in the middle of the Sahara or in some other desert-like country.
It could be argued, however, that the tankering should not have been stopped. It was costing the water company £3 million a week, but I am still not sure that the operation should have ended. We were glad, of course, when we


were told that 24-hour cut-offs would be withdrawn for the time being. We were pleased also when Yorkshire Water announced that it would spend another £100 million on new pipes and pumps. It would be a mistake, however, to assume that the crisis is over. Nothing could be further from the truth.
The Halifax Courier, a newspaper which is read by the hon. Member for Calder Valley and by me, made it clear last night through its "Water Watch" that reservoir stocks in Calderdale stand at only a third of capacity. They should be about 80 per cent., but they are only 27.4 per cent. We are halfway through the winter and our reservoirs are only a third full. It does not take a genius to work out that we shall be in trouble unless there is massive rainfall or unless Yorkshire Water commits itself to doing something to take account of the long-term problem.
The Minister should know that the people of Halifax and the surrounding areas, after the way in which they have been treated, despise Yorkshire Water. If he wants to do anything to help to improve the Government's poor electoral chances, he should stop digging when in a hole. The people all blame Yorkshire Water's mismanagement, but they know that at the root of the problem is the disastrous privatisation of a precious utility. There is no doubt that, if further cut-offs take place, there will be a disaster. It seems that even the Minister accepts that now. It took some time for the message to sink in.
At the beginning of the crisis, Dr. Chris Worth, the public health director for West Yorkshire health authority, spelt out the consequences. He drew the attention of the Dewsbury inquiry to them, when he said that
the health of thousands of Calderdale and Kirklees elderly, frail and mentally ill people would be threatened, and I can foresee a situation regrettably where lives may be lost.
The Minister should try to get that message through to the Prime Minister. The people of West Yorkshire demand that the Government concentrate on the health and well-being of those in the area. They should concentrate also on their jobs.
The Government must abandon the stupid diversionary tactics in which they have been engaged over the past few weeks. The silly stunt of the chairman of the Conservative party will not bring a drop of water through taps in Halifax or anywhere else. The Deputy Prime Minister's manic outbursts will not move Yorkshire Water into action. Only the Government can ensure that action is taken, and that is the Government's responsibility.
My hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson) should be congratulated on playing a superb role in monitoring the privatised water companies. She has drawn attention to their pathetic and awful actions. She had the support of hundreds of Members when she called on the Secretary of State, through an early-day motion, to use his emergency powers to take over the running of Yorkshire Water. I challenge the right hon. Gentleman to do so. If he cannot or if he will not, let him give the House a copper-bottomed guarantee that no authority or household will run short of water because of Yorkshire Water's mismanagement.
It is not only Labour Members who are criticising Yorkshire Water. Local Tory Members, who voted for privatisation, are now taking it to task. In addition, local chambers of commerce have been active, both in Calderdale and in Kirklees. They have warned that, even

if there are limited cut-offs, 3,000 jobs could be put at risk. They have warned that businesses would close. Indeed, much damage has already been done by the antics and bizarre public relations of Yorkshire Water.
What business man or woman in his or her right mind would want to invest in an area where the water supply cannot be guaranteed? I cannot think of a greater disincentive. The Government have no idea—if they have, they do not care—of the long-term consequences. They do not appreciate the damage that a privatised company has done to business confidence in west Yorkshire. They have put ideology and dogma before people.
The Government's policy has not been supported by the majority of people. There was an excellent article in The Guardian this week on the privatised utilities, and on Yorkshire Water in particular. It is worth quoting Brian Rhodes, a Keighley business man, who said that
when water was privatised they"—
his company—
installed a bore hole to supply their own water needs".
He explained that
we knew a private-water monopoly would create havoc. But still they sent us that silly letter telling us to save water
and to relocate. "Silly sods", he concludes. Although I am quoting, I must agree with that. He went on:
We've just got £19m out of the Government to promote manufacturing industry in this area—but Yorkshire Water's done more in one summer to destroy any chance of bringing jobs here".
We all know about the scandal of leakages. I shall not repeat what my hon. Friend the Member for Hillsborough said, but it is worth noting that, out of the massive profits that Yorkshire Water made, just £11 million was set aside—

Mrs. Helen Jackson: Will my hon. Friend give way on that point?

Mrs. Mahon: Certainly.

Mrs. Jackson: I am grateful to my hon. Friend. Before she leaves the question of leakages, does she agree that a 10 per cent. reduction in the leakage of 100 million gallons a day would have prevented the problems that were experienced in Yorkshire this summer?

Mrs. Mahon: Absolutely. My hon. Friend is right, but because of time I shall not repeat the points that she made earlier. That is a good point. The truth is that Yorkshire Water is at the top of the national league for wasting water supplies—103 million gallons a day are lost through leaks. That is gross incompetence and mismanagement.
Yorkshire Water sacked half its work force—the people who understand about managing the industry. It is not accountable to anybody. It still has a leakage detection team, but only just. Before the crisis, Yorkshire Water had proposed bringing in a scheme called Operation 2000, which was to be implemented in October, which would have abolished the leakage detection teams. Yorkshire Water was going to sack the people who do all the valuable work up on the moors. Those people find out where the leaks are occurring and then gangs of locally employed people go along to mend them. Now we have wastage on the moors. Reservoirs are silted up from 30 ft to 100 ft. Often, the reservoir keepers are now


responsible not just for one reservoir but for 10. Two years ago, Yorkshire Water also considered replacing all its skilled workers with Securicor employees. That is the level of neglect that we have had from Yorkshire Water. Never again should it be allowed to bring the health and well-being of people in my constituency and in West Yorkshire to the point that it did. Sir Gordon Jones is going, but others should follow him.
As for Labour councils and the RMT buying shares, I wish that they could buy the lot and then we would have some public accountability. I do not think that the Government really appreciate the anger in West Yorkshire. If we have cut-offs, I think that there would be a public order problem, because people blame Yorkshire Water and detest it for its actions. The fact that it is funding and setting up its own inquiry will not do; we want an independent public inquiry, as my hon. Friend said.
Yorkshire Water said that it will invest another £100 million in pipes. We should look carefully at what that investment means. It means going to the already depleted rivers and taking even more water out of them. That will lead to a disaster in the environment. There should be a massive investment programme now, perhaps to get water from Kielder water. It is possible to go across deserts, so I do not want any nonsense about having to go up hills and down dales; it should not be beyond comprehension to do that now.
What Yorkshire Water says that it will invest is too little too late. We do not trust it. We do not trust the Government with this precious resource which we all need. We want a general election, and then the people of West Yorkshire can show the Government exactly what they think about them and their privatisation.

Sir Giles Shaw: I am grateful for the fact that the Opposition included the privatised water industries as a subject for debate. I must declare that I was, until March 1995, a non-executive director of Yorkshire Water. Since then, I have been a consultant on corporate and marketing affairs. I have lodged details in the Register of Members' Interests. I must also take great care that I do not operate in the debate as an advocate for Yorkshire Water, as that is clearly against the spirit of the debate. Having heard the generality of comments, including those of the hon. Member for Halifax (Mrs. Mahon), I suspect that even my courage will fail in the task of advocacy, because clearly Yorkshire Water is the spectre at this feast that the Opposition are quite enjoying.
If ever there were an annus horribilis for Yorkshire Water, it was 1995. When I left in March, the reservoirs were full, it was a bright spring and there was not a cloud in the sky—but the falling percentage of rainfall led to an exceptional drought. It is not for me to go through the history of the matter, as that has been well established. I understand and most deeply regret the way in which Yorkshire Water managed to achieve, through a range of public relations propositions, letters to industry or other public observations, a series of gaffes which thoroughly damaged its credibility with its customers and, indeed, with others.

Mrs. Helen Jackson: Will the hon. Gentleman give way?

Sir Giles Shaw: Forgive me, but, because of the time, I must press on.
Added to that was the increasing public backlash against private utilities as a whole—which the Opposition have so well developed—aided and abetted by the media campaign about fat cats. I note that the media are somewhat shy about their own salary structures. No doubt they are seeking to protect their own sources, as is their wont. Yorkshire Water was vilified or satirised in the press—despised by some of its public and ostracised by most. That is not a welcome position for a public limited company to be in only six years after privatisation.
Nevertheless, as my hon. Friend the Member for Calder Valley (Sir D. Thompson) said, and as the hon. Member for Halifax just recognised, the fact is that, after all the trauma, not a house, hospital, retirement home, school, small firm or large firm was disconnected from supply or suffered a serious shortage of water. One of the reasons was that the area that was affected was extremely small, although the Yorkshire region is vast and the company has responsibility for distribution in the whole region. The area is crucial but very small in relation to total Yorkshire demand and provision.
As my hon. Friend made clear, it was geographically and historically separated from the rest of the arrangements. Yorkshire has had grids for many years. The main grid, which runs from rivers in the north and east of Yorkshire, particularly the River Derwent, and across to Sheffield, was put in subsequently. Sheffield takes water from Ladybower reservoir. With a massive effort, the staff ensured, by working night and day, that everything was finally put in place. It moved resources by pipe transfer or road tanker and managed to maintain supply.
The trauma was substantial for the company, for the people who were affected and, indeed, for the people in Yorkshire as a whole. It is very important that lessons are learned and not just in Yorkshire itself. I am happy to be able to reassure the hon. Lady that the emergency investment that is now taking place, where some £100 million is being spent to connect 10 pumping stations so that the grid can deliver 300,000 cu m of water a day into Leeds, Bradford, Calderdale and Kirklees, will make a huge difference to the problem. That is a short-term arrangement. Arrangements for the longer term depends on a review of resources and on longer-term decisions which have yet to be made.
I now come to the lessons for the industry as a whole, as that is equally important. If the water industry is no longer to plan for events that are expected to occur once in 100 years, and ignores events that are expected to occur only once in 200 or 250 years, as occurred in relation to the extreme water shortage in the portion of the Pennine catchment to which the hon. Member for Halifax and my hon. Friend the Member for Calder Valley referred, there will be a very major shift in what water companies must do to maintain supply.
My right hon. Friend the Secretary of State—who, unfortunately, is not present now—has said that no eventuality, however rare, should result in a shortage of public water supply, and certain other hon. Members have said the same. The structure of water resource management must therefore shift markedly. The present industry—as defined in relation to what may occur once in 100 years—is not structured to meet such change.
There must be a public debate about whether we should create more water resources. For instance, should we construct further reservoirs? That might involve problems in a beautiful region such as Yorkshire. Should there be more reservoirs in the dales, or in the Lake district? Should there be more reservoirs on Dartmoor? None of those propositions seems feasible, but they must be considered.
Alternatively, should we take more powers to abstract from rivers or to move volumes of water through the river system? The hon. Member for Sheffield, Hillsborough (Mrs. Jackson) was anxious about abstraction, but we currently waste huge amounts of water through our river system. If we are to ensure that the public have priority in terms of supply, we ought to be able to act at certain times of the year. We should never go beyond the permitted amount of abstraction, and never infringe low levels of supply, but there is a case for saying that, with Yorkshire's massive rivers—largely located in the east of the region—abstraction could serve as a useful way of saving water.
Another option is to require less control on the maintaining of river flows by releasing reservoir waters. Yorkshire Water already has to take such action in drought conditions. Again—this idea is no doubt dear to the hearts of Opposition Members—we could try to reduce leakage rates. I feel that that should definitely be tried during what ought to be an attempt to recover economic costs. In fact, the reason why leakage has never posed a serious threat to the viability of water supply is the astronomical cost of recovery, which has been estimated at approximately £400 million for a 1 per cent. leakage reduction. If such a figure must be contemplated, there will be major repercussions in the industry.
Leakages are prevalent in areas containing many miles of piping. Yorkshire contains more than 30,000 km, going in and out of huge Pennine ranges, distributed up hill and down dale; heavy pumping is used in an attempt to enable the water to reach its destination.
Finally, perhaps we should accept that 1995 is symptomatic of a pattern of climate change that will permanently alter the rainfall conditions that we may expect in the future. It may be a little early to take that view, but it must be taken into account.
All those are big issues, affecting not just the structure of the industry but the terms under which it was privatised, and the terms under which the regulator ensures that certain standards of supply, abstraction and discharge are imposed on the 10 water companies. Water supply currently costs an average of 29p or 30p a day in my area, perhaps a little more; but, quite apart from that cost, we may have to look again at the general question of how the supply is to be costed and paid for. That will lead to numerous questions. Essential fuels such as gas and electricity carry an understandably high price when delivered to the consumer, as opposed to the cost of water, which can be measured in pence. The high price of energy, and the fact that fuels carry a safety hazard, make it essential for closed systems to supply households by means of meters.
Water metering, however, is a vexed issue among the public, although it is the regulator's preferred option. I believe that Yorkshire Water conducted a substantial public consultation exercise, as a result of which it accepted the public's view that imposed metering was not

acceptable but that metering should remain an alternative. It must be accepted that the industry should have proper regard for consumer wishes, and the lessons of 1995 clearly suggest that the idea of wholesale metering should be abandoned. I do not think that it is acceptable to consumers.
Unlike gas and electricity, the water industry is responsible for the maintenance of a huge slice of our natural environment—hence the heavy legislative load on discharges from sewage works, and the gradual improvement of rivers under the obligations laid down by the National Rivers Authority as well as the EU. I am delighted to learn that, during the past week, a salmon was found way up the River Don, having apparently succeeded not only in travelling so far upstream but in spawning. There have been genuine improvements in our aquatic environment.
Supporting access to reservoirs and catchment areas imposes an entirely different responsibility, which does not relate to the commercial supply of potable water. Water companies must recognise such obligations, which play an important part in establishing relationships with the public in the regions.
All those issues are raised by the spectre of continuing water shortage, and of permanent damage to the cycle of replenishment through autumn, winter and spring. I do not feel that that is likely to happen as a result of events in 1995. In Yorkshire, although the eastern slopes of the Pennines were severely affected, many other parts of the region suffered less; even the aquifers that are so important to Hull and Humberside were able to continue unimpaired.
Nevertheless, I suggest to Ministers that the problems of 1995 should be assessed, given the possibility that they will occur elsewhere, even in the near future. It would surely be wise to conduct the fullest possible analysis of the recent past. There should also be better forecasts of whether the current conditions represent a trend, or whether—in economic parlance—we are merely experiencing a blip on the meteorological graphs. Given the availability of such evidence, industry, regulators and Government should reach a consensus on the extent to which the lessons learned in 1995 should fashion their policies for the future.

Mr. Jack Thompson: May I try to correct some misapprehensions that were created earlier? The hon. Member for Teignbridge (Mr. Nicholls) spoke of Labour authorities' investments in water authorities. As I tried to make clear to him, there was no choice. A local authority with an investment panel must take the advice of pension fund advisers; if it does not, and makes a mistake, it can be surcharged.
The water industry was never nationalised; it was regionalised. That was one of the problems. I was a member of a water authority in my region when Kielder was built—when, incidentally, it was under regional control rather than privatised. One of the country's main problems is the fact that we do not have a proper water system. We have grids for electricity and gas, but no grid for water. It makes no difference whether the industry is nationalised or privatised: both electricity and gas have been privatised, but they have grids. We should aim to create such a system for water in the future. Yorkshire


would not have experienced the problems that it experienced this year if the water from Kielder had been piped through rather than carried by tankers. That could easily have been done.

Mrs. Helen Jackson: It was suggested in 1973 that a lake should be built from Kielder to Yorkshire, because Yorkshire would need the water by the early 1990s. The lake was never built, however.

Mr. Thompson: A pipeline already takes water from Kielder down to the Tees; it is halfway there.
I want to concentrate on the effect of privatisation on my constituency, and on events that took place early in January, when 50,000 of my constituents had their water cut off for four days. Briefly, the problem arose because, apparently—the water authority there has just discovered this—the reservoir that feeds my constituency is the highest in the region. During a series of bursts and leaks, in the Tyneside area in particular, all the water drained out of the system and the reservoir feeding my constituency was left, one may say, high and dry. We had no water for four days. The water authority story's was that that was necessary because it had to maintain the water supply to Tyneside.
We had two water authorities in my constituency then: Northumbrian Water and North East Water, which is owned by the French company Lyonnaise des Eaux. Northumbrian Water was a free-standing company at that time. The pipeline feeding my constituency was owned by North East Water but operated jointly by Northumbrian Water. The water was maintained on Tyneside—I have no criticism of that—at the expense of my constituency and, I think, because North East Water was the dominant partner in the arrangement. It maintained the supply to Tyneside at the expense of my constituents.
The real problem is the weakness in the system, which has now been identified but which, apparently, could not be identified before. If one has to live for a prolonged period without water, or at least with a limited supply provided by tankers at street corners, one quickly begins to appreciate the value of this basic need which is often taken for granted. I personally must declare an interest as my home was one of those affected.
From the water companies' own information, it was apparent that a potentially serious situation was developing between Christmas and new year's day. The companies claimed that the deep frost, followed by a thaw, and their staff being on holiday, contributed to the position. It seems that they were unaware that it turns colder in the winter and that the risk of water mains bursting increases during these months.
Even when those companies were aware of the emergency, little information was given to consumers. Householders, commercial premises and some industrial units learned of the loss of their supply when they tried to turn on their taps. Hot water and central heating systems, and commercial and industrial operators were seriously affected.
Total confusion reigned. People were not made aware of the emergency or informed adequately of the emergency provisions, limited though they were.
Although Northumbrian Water admitted that it had mobile loudspeaker equipment, it was not used. After people had been obtaining from tankers and bowsers for some days, they were advised by postcard to boil the water. The whole exercise was an example of incompetence or, possibly, a lack of interest in consumer welfare.
After the emergency and pressure from me and from other community representatives, the companies decided to offer £40 to each householder, £80,000 to Wansbeck district council and a belated £13,000 to Castle Morpeth borough council, both of which are in my constituency. Commercial premises, however, such as shops, pubs and the numerous social clubs in my constituency were advised by the water companies to claim from the insurers. Some insurers are refusing to pay out, claiming that the loss of the water supply was a deliberate act by the water companies—an argument with which I agree. Business was lost because of the actions of the water companies.
Coincidentally, as the massive problems were arising, Northumbrian Water, in this free market system, was taken over by Lyonnaise des Eaux, making all the water and sewerage industry in north-east England a monopoly. Last week, it announced the inevitable reorganisation of management, with probable job losses associated with the takeover on the agenda.
The most significant happening was the decision of Northumbrian Water's chief executive, David Cranston, to quit. He leaves after receiving a salary of £189,000 a year for 1994–95—I understand that that is to be paid for the next two years as well. That has increased by 232 per cent. since privatisation. He realised between £800,000 and £1.2 million from shares and share options after the sale of Northumbrian Water.
Last October, Mr. Cranston sought and obtained a meeting with a northern group of Labour Members to plead for our support against the takeover. That was a nice pay-back for his efforts in giving financial advice to the Government on how to process the privatisation of the industry. His reward is greater than the total sum paid to my constituents and the local authorities put together.
When the industry was privatised, Labour Members often warned that the consumer would suffer. My constituents paid a high price. Capital investment by Northumbrian Water fell from £110 million in 1990–91 to £77 million in 1994–95—a 30 per cent. reduction. Sustained investment could have been used to correct the fundamental fault in the supply system to my constituency. That is a prime example of profit before people.

Mr. George Robertson: This has been an interesting and lively debate. It could almost have been completely about Yorkshire Water had it not been for the fact that my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) made sure that the inequities in other parts of the privatised water industry were also drawn to the House's attention.
It is remarkable that, contrary to custom and practice, the Cabinet member who is responsible for the matter raised in the Opposition motion—the Secretary of State


for Scotland—is away from the House in some other part of the country. There was a day when that convention and courtesy mattered.

Mr. Michael Bates (Lord Commissioner to the Treasury): He is in Scotland.

Mr. Robertson: The Secretary of State may be in Scotland—so could I be—but some of us believe that the House comes first and that, if there is a debate on a subject that is in his province, he should be here, and he knows that. In Stirling yesterday, at the meeting of the Scottish Grand Committee, a great song and dance was made about the fact that I did not speak from the Dispatch Box, but I was there—as I have been at all that Committee's meetings. The Secretary of State chooses not to be here tonight, and for two and a half hours or more no one from the Scottish National party was here either.
We have now been left in charge. The Minister dubbed by the Scottish Daily Record the "big drip" will—appropriately—answer on behalf of Her Majesty's Government on the subject of the water industry. He has been landed with a real problem. The animated little Secretary of State for the Environment is not sitting beside him, and no wonder because he left a sizeable grenade in the Minister's pocket.
During his leaping around at the Dispatch Box, the Secretary of State told the House à propos the water industry that, in England and Wales, the investment would not be forthcoming in the public sector, but the hapless Scottish Office Minister with responsibility for the water industry will have to come to the Dispatch Box and tell us that Scottish water will remain in the public sector. He, presumably, is going to find all the investment that the Secretary of State for the Environment said would be absent if a different model had been chosen for England.
Many of my hon. Friends have made much of Yorkshire Water's performance during the summer, and I am not surprised. A level of anger built up in that part of the world about the lamentable performance of that privatised water company. My hon. Friends the Members for Halifax (Mrs. Mahon) and for Sheffield, Hillsborough (Mrs. Jackson) have put their finger on a saga of incompetence, failure and waste which will go down in the history of the water industry as unsurpassed.
The Minister, if he dares move across the border and into English territory, will have a job putting up a defence, although the hon. Member for Pudsey (Sir G. Shaw), who told us that he was not going to act as an advocate for Yorkshire Water, managed to read out what was preciously close to a press release for that beleaguered company.
The debate has highlighted what has happened in England and Wales since privatisation. It is a salutary warning for those of us in Scotland who see the prospect of privatisation looming on the horizon. It is a tale of waste, fat cats, inefficiency, bloated profits, personal aggrandisement and of course, at times, pure farce—all occurring simultaneously at a time of declining investment in a vital industry.
The Government's intention has always been to privatise the Scottish water industry. That ambition lives on in the hearts of many people, including the new Secretary of State for Scotland. The Government were prevented from privatising it only by the sheer force of

public opinion in Scotland. A Labour-led campaign and a violent upsurge in public opinion stopped the Government in their tracks and prevented them from doing in Scotland what they have already done in England.
In eight weeks' time, Scotland's water and sewerage services will leave locally elected control for the first time in 150 years and be handed over to three super-quangos staffed by handpicked people who are ready to do the Government's bidding and who are accountable only in the loosest possible sense to the public.
In 15 months' time, however, there will be a general election. I have no doubt, and the people of Scotland have no doubt, that if the Tories were somehow to get back into power, their secret agenda to privatise the Scottish water industry would remain.
The Government's private agenda is already under way. Privatisation is happening, drip by drip, in the unique form of the private financing package that the Government have carefully designed to get the private sector into the water industry with minimum risk and maximum profit—it is feather-bedding of the private sector in a crucial sphere.

Sir Hector Monro: Before the hon. Gentleman makes any more thoroughly irresponsible statements about water privatisation, I have to ask whether his conscience does not prick him a little because his campaign began on a totally incorrect basis. The decision to go to a public water authority was made long before he started his campaign against privatisation.

Mr. Robertson: I should like to pay tribute to the right hon. Gentleman, who has come into the Chamber at the end of the debate specifically to hear my speech. I believe that he does not want Scotland's water to be in the private sector. It was he who agreed, under pressure, that a ban on disconnections should be included in the Local Government etc. (Scotland) Act 1994, for which I pay him due tribute. I do not think that he has any intention of seeing Scotland's water industry in the private sector because he knows the dangers that would follow.
The right hon. Member for Dumfries is retiring at the next election, and there will not be a Conservative Member of Parliament for Dumfries after that. He cannot trust Ministers any more than we can. If he trusts the Secretary of State for Scotland with Scotland's water, it will probably be the first time in his life that he has trusted him. The right hon. Gentleman should take his plaudits and go away into happy retirement, but he should certainly not leave the NHS and the water industry in the hands of people who might conceivably still be here after the next election.
The Government have designed this type of private financing specifically to ensure that their friends do well out of it. However, it is hard to think of a better way for the Government to reduce their public standing than by threatening the water industry. It is small wonder that they now have an 11 per cent. approval rating in the opinion polls, which I believe is 8 per cent. less than the Canadian Tories received in the general election when they were reduced to two seats in the federal Parliament.
The emperors in the Scottish Office arrogantly dismiss public opinion with a flick of their wrists, ignoring and rejecting the fine, long history of locally elected water authorities in Scotland, which have been efficient,


reliable, safe and cheap. The Government reject the logic of keeping a direct line of accountability to the people who use and depend on public water supplies. They reject even the revolutionary public health record that, a century ago, was the justification for municipal control of water and sewerage services. They reject it all in the name of a purely ideological obsession with centralisation and the hoarding of control.
The Government's secret agenda is still to put Scotland's water industry into the same fat cat system that the Government have inflicted on water consumers in England and Wales. However, the emperors of the Scottish Office have been found to have no clothes. Isolated, remote and doomed, they sit wasting their last few days in office.
The contention that people have in relation to what the Government are doing with the Scottish water industry has not been invented by the Opposition. In March 1994, Strathclyde regional council, having taken all the legal advice that was available, put the question to the people of Strathclyde—half the population of Scotland—in a referendum. The council took its courage in its hands and issued ballot papers throughout the region. The turnout for the referendum was 71.5 per cent., which exceeded everyone's expectations—it was certainly more than I had warned the council that it might expect—and 97 per cent. of those who voted said no to the quangoisation of the water industry. Those are the facts; that is the truth and the evidence.

The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): Will the hon. Gentleman confirm that the publicity put out by the Labour party in Strathclyde did not merely say no to water quangos, but said no to privatisation? Is not that a total distortion of the facts as that is not what we have done in Scotland?

Mr. Robertson: It was open to the Tory party to put out its own propaganda. The ballot paper, which was read and understood by the people who answered, asked whether people agreed with the Government's proposal for the future of water and sewerage services in Scotland. The ballot paper was legally drawn up, and people understood it. Even in the Tory heartland—in Eastwood, in the west of Scotland—95 per cent. of the people voted no in the referendum. I suppose the Minister is saying that all those people read the leaflet and were confused, taken in and mystified by it—that that can be the only explanation for 95 per cent. of the people voting no. The people spoke in that referendum, but the Government chose to ignore the popular view.
I see that the unacceptable face of the Scottish Office, the Under-Secretary of State for Scotland, the hon. Member for Aberdeen, South (Mr. Robertson) has joined us in the Chamber. I can assure you, Mr. Deputy Speaker, that the noise level will rise, but the quality of the contributions to the debate will decline markedly.
Why should we suspect that the Government want to privatise the water industry? We have only to look to what the Prime Minister said in March 1993. He said:
Privatisation means a better, more efficient service for the consumer and no more subsidies from the taxpayer. I have no reason to doubt that water privatisation in Scotland will be effective and efficient, as elsewhere."—[Official Report, 9 March 1993; Vol. 220, c. 783.]

Those are the words of the Prime Minister, blundering into something that he did not understand, but giving away the underlying case.
In the consultative document on water, 15 lines were devoted to describing the scheme which the Government ultimately chose, but 216 lines were devoted to describing the privatisation option. Anyone who believes that the new Secretary of State for Scotland, who was on television only a few weeks ago saying that Thatcherism has a lot to offer Scotland, is going to stand back and say, like the right hon. Member for Dumfries, "I won't touch the water industry. It can remain in public hands", must be living in a dream world.
The Government have chosen a completely new system to finance new investment in Scotland's water industry. The Chemical bank, in an independent report, said that the system did not pass
any reasonable value for money test",
and that the "build, own and operate" schemes will privatise Scotland's water industry "drip by drip". The schemes are little more than sweetheart deals to get the private sector into the water industry with minimum risk and maximum profit.
The Chemical bank report went on to say:
The guidelines are misconceived. Their use imposes an excessive and unnecessary burden on ratepayers. There are other ways in which the private sector can finance public projects at a cost comparable with the use of the public funds.
Labour would not hesitate to use the private sector in schemes to help with new investment in the water industry, but we will not choose schemes that mean privatisation by stealth or privatisation by the back door. Scotland's water industry has an impeccable record in public hands. Investment in the water industry is possible in the public sector, and it can be done well. There is no need, no rationale, no justification for going ahead with the quangoisation and, ultimately, privatisation of water in Scotland. At the next election—the sooner it comes, the better—the people of Scotland will teach the Government a lesson for what they have done so far.

The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): This has been an exceedingly interesting debate. I have learnt a lot about Labour policy on water. I have learnt a lot that confirms that the Labour party does not understand the slightest thing about running business. [Interruption.]
Opening the debate, the hon. Member for Holborn and St. Pancras (Mr. Dobson) gave many figures relating to the privatised water companies. He talked about everything and nothing. The one thing that he did not really talk about, however, was investment. We all know that the water industry requires significant investment. My right hon. Friend the Secretary of State for the Environment described very clearly the remarkable success that has been achieved south of the border through the privatisation of water companies.
Hon. Members on both sides of the House have referred to Yorkshire Water. I have also learnt that, although Yorkshire Water is clearly not one of the stars of the privatisation process, many of its problems, as I understand them, have been brought about by the extremely severe drought in the summer. It would be


unreasonable of any hon. Member not to accept that there was exceedingly severe weather and that lessons must be learnt from the experience. I know that my right hon. and hon. Friends have taken steps to obtain independent reports to confirm that the actions of Yorkshire Water are indeed all there—[Interruption.]—and that it is taking sensible measures to ensure that the problems do not arise again.
Many hon. Members have referred to leaks. The Government obviously take the problem of water leaks extremely seriously and we have made it perfectly clear that losses from pipes in some water company areas are too high. We expect water companies to set and fulfil demanding targets for reducing leaks. Indeed, water service companies have given a commitment to achieve within 10 years the lowest levels that best international practice suggests. Some companies have already announced their plans. Others will do so in the next few months. The Director General of Water Services will consider whether the targets are sufficiently rigorous. If they are not, legislation is already in place to set mandatory levels where necessary.
Many hon. Members, especially Labour Members, were unreasonable about the conditions that Yorkshire Water had—and still has—to face, and their observations were in contrast to the very thoughtful and responsible comments of my hon. Friend the Member for Pudsey (Sir G. Shaw).
The hon. Member for Truro (Mr. Taylor) made points about European support for privatised companies. I can confirm that, as I understand it, provided the relevant criteria are met, privatised and publicly owned water companies have exactly the same access to European support. He also referred to methods of charging. We think that charging by volume is important to ensure sustainable use of water in the long term. The Government—certainly south of the border—encourage companies and customers to switch to meters, but are not forcing them to do so.
Since I was able to obtain a press release issued by the hon. Member for Hamilton (Mr. Robertson) before he stood up, his speech was nothing short of what I expected—[Interruption.]

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. I am having great difficulty hearing what the Minister is saying. He has the right to a fair hearing, as was given to the Opposition spokesman.

Mr. Kynoch: I was referring to the press release on the speech of the hon. Member for Hamilton which I managed to obtain. In it, he persisted with scare stories and distortion, which he is more than capable of, as he has shown throughout the discussion of the future of water in Scotland. Unfortunately, like his hon. Friend the Member for—[Interruption.] I cannot remember his constituency, which goes to show I have been attending too many Scottish Grand Committees and have become better on Scottish constituencies than those south of the border.
That leads me comfortably to the fact that my right hon. Friend the Secretary of State for Scotland is in Shetland with the leader of the Liberal Democrats in Scotland on official engagements. At least my right hon. Friend has deigned to lead the debates on law and order and education in the Scottish Grand Committee. The hon. Member for Hamilton seems to put those matters below water privatisation south of the border.
During the debate, the hon. Member for Hamilton referred to several issues concerning whether the Government intend to privatise water north of the border. I repeat quite clearly once and for all that the Government have no intention of privatising water north of the border.
The reorganisation of water in Scotland became necessary for several reasons. First, as south of the border, we faced the problem of having to achieve significant investment in, the industry over the next 10 to 15 years. Secondly, we have reorganised local government, and it would be ridiculous to put water into the hands of the 32 new authorities. Doing that would have resulted in very small water authorities which would not have had the benefits of economies of scale necessary to attract investment.
I therefore regard the creation of three new water authorities as the most sensible way forward, having recognised the very strong feelings of the people of Scotland. There were about 5,000 responses to the consultation document that was put out in 1992. The Government paid attention to those responses and went for a route that kept water in the public sector in Scotland.

Mr. Phil Gallie: Is it not the case that some of the criticism that applied to Yorkshire Water, especially recently after the cold spell, applied to an even greater extent in Scotland, where many people's supplies were cut off? Was not water in the hands of local authorities?

Mr. Kynoch: My hon. Friend makes a valid point.
The hon. Member for Hamilton referred to the Chemical bank report, but that is of course —unfortunately—not the whole story. The hon. Gentleman fails to understand that the private finance initiative is much more than simply getting funding from either the private sector or the public sector. It is about trying to get the innovation and design skills of the private sector into public sector projects.
In the Chemical bank report, there was indeed a capital project, which—I think—in public sector terms was valued at about £145 million. At the last count, I understand that the private sector had quoted a value of about £60 million for it. Significantly reduced capital costs put a totally different complexion on the arguments in that report.
The hon. Member for Hamilton has clearly stated that he does not believe that he should not be using the private sector; he simply believes that he should be using it for funding rather than for bringing in private sector skills. I strongly dispute his assertion and argue that he will not find cheaper finance by that route. Indeed, he will have a problem in Scotland. Not only will he have to fund his new local government structure with a tartan tax, he will have to introduce a special tax to fund the future of the water industry.
The one thing that we have learnt in this debate is that the Labour party south of border has committed itself to a very distinct policy on water in England and Wales. The hon. Member for Holborn and St. Pancras clearly stated that he would not renationalise the privatised companies, but that he foresaw their being brought back under political control. He also said that he would bring about a reduction in prices in real terms south of the border, but he did not say how he would fund that policy. Even at this


late stage in the debate, I challenge him to say whether he would put taxes up, or whether he would reduce services in the NHS or in education. If not, how would he fund it?

Mr. Dobson: We shall reduce the outrageous profits that those companies make, and the outrageous pay that the bosses give themselves.

Mr. Kynoch: The hon. Gentleman does not recognise the basic facts of financial life—that those profits were made in order to invest in the water industry. The sooner he looks at the investment figures and realises that investment is now more than double what it was when the Labour party was in power, the better for him. If his financial policies ever have to be put into practice, God help the country. I strongly urge the House to support the amendment.

Question put, That the original words stand part of the Question:

The House divided: Ayes 275, Noes 303.

Division No. 39]
[7.00 pm


AYES


Abbott, Ms Diane
Clarke, Eric (Midlothian)


Adams, Mrs Irene
Clelland, David


Ainger, Nick
Clwyd, Mrs Ann


Ainsworth, Robert (Cov'try NE)
Cohen, Harry


Allen, Graham
Connarty, Michael


Anderson, Donald (Swansea E)
Cook, Robin (Livingston)


Anderson, Ms Janet (Ros'dale)
Corbett, Robin


Armstrong, Hilary
Corbyn, Jeremy


Ashdown, Rt Hon Paddy
Corston, Jean


Ashton, Joe
Cousins, Jim


Austin-Walker, John
Cox, Tom


Barnes, Harry
Cummings, John


Battle, John
Cunliffe, Lawrence


Bayley, Hugh
Cunningham, Jim (Covy SE)


Beckett, Rt Hon Margaret
Dafis, Cynog


Beggs, Roy
Dalyell, Tam


Beith, Rt Hon A J
Davidson, Ian


Bell, Stuart
Davies, Bryan (Oldham C'tral)


Benn, Rt Hon Tony
Davies, Chris (L'Boro & S'worth)


Bennett, Andrew F
Davies, Ron (Caerphilly)


Benton, Joe
Davis, Terry (B'ham, H'dge H'l)


Bermingham, Gerald
Denham, John


Berry, Roger
Dewar, Donald


Betts, Clive
Dixon, Don


Blair, Rt Hon Tony
Dobson, Frank


Blunkett, David
Donohoe, Brian H


Boateng, Paul
Dowd, Jim


Bradley, Keith
Dunwoody, Mrs Gwyneth


Bray, Dr Jeremy
Eagle, Ms Angela


Brown, Gordon (Dunfermline E)
Eastham, Ken


Brown, N (N'c'tle upon Tyne E)
Etherington, Bill


Bruce, Malcolm (Gordon)
Evans, John (St Helens N)


Burden, Richard
Ewing, Mrs Margaret


Byers, Stephen
Fatchett, Derek


Callaghan, Jim
Faulds, Andrew


Campbell, Mrs Anne (C'bridge)
Field, Frank (Birkenhead)


Campbell, Menzies (Fife NE)
Fisher, Mark


Campbell, Ronnie (Blyth V)
Flynn, Paul


Campbell-Savours, D N
Foster, Rt Hon Derek


Canavan, Dennis
Foster, Don (Bath)


Cann, Jamie
Foulkes, George


Carlile, Alexander (Montgomery)
Fraser, John


Chidgey, David
Fyfe, Maria


Chisholm, Malcolm
Galbraith, Sam


Church, Judith
Galloway, George


Clapham, Michael
Garrett, John





George Bruce
Madden, Max


Gerrard, Neil
Maddock, Diana


Gilbert, Rt Hon Dr John
Mahon, Alice


Godman, Dr Norman A
Mandelson, Peter


Godsiff, Roger
Marek, Dr John


Golding, Mrs Llin
Marshall, David (Shettleston)


Gordon, Mildred
Marshall, Jim (Leicester, S)


Grant, Bernie (Tottenham)
Martin, Michael J (Springburn)


Griffiths, Win (Bridgend)
Maxton, John


Grocott, Bruce
Meacher, Michael


Gunnell, John
Meale, Alan


Hain, Peter
Michael, Alun


Hall, Mike
Michie, Bill (Sheffield Heeley)


Hanson, David
Michie, Mrs Ray (Argyll & Bute)


Hardy, Peter
Milburn, Alan


Harman, Ms Harriet
Miller, Andrew


Hattersley, Rt Hon Roy
Mitchell, Austin (Gt Grimsby)


Henderson, Doug
Moonie, Dr Lewis


Heppell, John
Morgan, Rhodri


Hill, Keith (Streatham)
Morley, Elliot


Hinchliffe, David
Morris, Rt Hon Alfred (Wy'nshawe)


Hodge, Margaret
Morris, Estelle (B'ham Yardley)


Hoey, Kate
Morris, Rt Hon John (Aberavon)


Hogg, Norman (Cumbernauld)
Mowlam, Marjorie


Home Robertson, John
Mudie, George


Hood, Jimmy
Mullin, Chris


Hoon, Geoffrey
Murphy, Paul


Howarth, Alan (Strat'rd-on-A)
Nicholson, Emma (Devon West)


Howarth, George (Knowsley North)
Oakes, Rt Hon Gordon


Howells, Dr Kim (Pontypridd)
O'Brien, Mike (N W'kshire)


Hoyle, Doug
O'Brien, William (Normanton)


Hughes, Robert (Aberdeen N)
O'Hara, Edward


Hughes, Roy (Newport E)
Olner, Bill


Hughes, Simon (Southwark)
O'Neill, Martin


Hutton, John
Orme, Rt Hon Stanley


Illsley, Eric
Parry, Robert


Ingram, Adam
Pearson, Ian


Jackson, Glenda (H'stead)
Pendry, Tom


Jackson, Helen (Shef'ld, H)
Pickthall, Colin


Jamieson, David
Pike, Peter L


Janner, Greville
Pope, Greg


Johnston, Sir Russell
Powell, Ray (Ogmore)


Jones, Barry (Alyn and D'side)
Prentice, Bridget (Lew'm E)


Jones, Ieuan Wyn (Ynys Môn)
Prentice, Gordon (Pendle)


Jones, Jon Owen (Cardiff C)
Prescott, Rt Hon John


Jones, Lynne (B'ham S O)
Primarolo, Dawn


Jones, Martyn (Clwyd, SW)
Purchase, Ken


Jones, Nigel (Cheltenham)
Quin, Ms Joyce


Jowell, Tessa
Radice, Giles


Kaufman, Rt Hon Gerald
Randall, Stuart


Keen, Alan
Raynsford, Nick


Kennedy, Charles (Ross, C&S)
Reid, Dr John


Kennedy, Jane (L'pool Br'dg'n)
Rendel, David


Khabra, Piara S
Robertson, George (Hamilton)


Kilfoyle, Peter
Robinson, Geoffrey (Co'try NW)


Lestor, Joan (Eccles)
Roche, Mrs Barbara


Liddell, Mrs Helen
Rogers, Allan


Litherland, Robert
Rooker, Jeff


Livingstone, Ken
Ross, Ernie (Dundee W)


Lloyd, Tony (Stretford)
Ross, William (E Londonderry)


Llwyd, Elfyn
Rowlands, Ted


Loyden, Eddie
Ruddock, Joan


Lynne, Ms Liz
Sedgemore, Brian


McAllion, John
Sheerman, Barry


McAvoy, Thomas
Sheldon, Rt Hon Robert


McCartney, Ian
Shore, Rt Hon Peter


McCartney, Robert
Short, Clare


McCrea, The Reverend William
Simpson, Alan


McFall, John
Skinner, Dennis


McKelvey, William
Smith, Andrew (Oxford E)


Mackinlay, Andrew
Smith, Chris (Isl'ton S & F'sbury)


McLeish, Henry
Smith, Llew (Blaenau Gwent)


Maclennan, Robert
Smyth, The Reverend Martin (Belfast S)


McNamara, Kevin



MacShane, Denis
Snape, Peter


McWilliam, John
Spearing, Nigel






Spellar, John
Walley, Joan


Squire, Rachel (Dunfermline W)
Wardell, Gareth (Gower)


Steinberg, Gerry
Wareing, Robert N


Stevenson, George
Welsh, Andrew


Stott, Roger
Wicks, Malcolm


Strang, Dr. Gavin
Wigley, Dafydd


Straw, Jack
Williams, Rt Hon Alan (Sw'n W)


Sutcliffe, Gerry
Williams, Alan W (Carmarthen)


Taylor, Mrs Ann (Dewsbury)
Wilson, Brian


Taylor, Matthew (Truro)
Winnick, David


Thompson, Jack (Wansbeck)
Wise, Audrey


Timms, Stephen
Worthington, Tony


Tipping, Paddy
Wray, Jimmy


Touhig, Don
Wright, Dr Tony


Turner, Dennis



Tyler, Paul
Tellers for the Ayes:


Vaz, Keith
Ms Ann Coffey and


Walker, Rt Hon Sir Harold
Mr. Eric Martlew.




NOES


Ainsworth, Peter (East Surrey)
Clifton-Brown, Geoffrey


Aitken, Rt Hon Jonathan
Coe, Sebastian


Alexander, Richard
Colvin, Michael


Alison, Rt Hon Michael (Selby)
Congdon, David


Allason, Rupert (Torbay)
Coombs, Anthony (Wyre For'st)


Amess, David
Coombs, Simon (Swindon)


Arbuthnot, James
Cope, Rt Hon Sir John


Arnold, Jacques (Gravesham)
Couchman, James


Arnold, Sir Thomas (Hazel Grv)
Cran, James


Ashby, David
Currie, Mrs Edwina (S D'by'ire)


Atkins, Rt Hon Robert
Curry, David (Skipton & Ripon)


Atkinson, David (Bour'mouth E)
Davies, Quentin (Stamford)


Atkinson, Peter (Hexham)
Day, Stephen


Baker, Rt Hon Kenneth (Mole V)
Deva, Nirj Joseph


Baker, Nicholas (North Dorset)
Dicks, Terry


Baldry, Tony
Dorrell, Rt Hon Stephen


Banks, Matthew (Southport)
Douglas-Hamilton, Lord James


Banks, Robert (Harrogate)
Dover, Den


Bates, Michael
Duncan, Alan


Batiste, Spencer
Duncan-Smith, Iain


Bellingham, Henry
Dunn, Bob


Bendall, Vivian
Durant, Sir Anthony


Biffen, Rt Hon John
Dykes, Hugh


Body, Sir Richard
Eggar, Rt Hon Tim


Bonsor, Sir Nicholas
Elletson, Harold


Booth, Hartley
Emery, Rt Hon Sir Peter


Boswell, Tim
Evans, David (Welwyn Hatfield)


Bottomley, Peter (Eltham)
Evans, Jonathan (Brecon)


Bottomley, Rt Hon Virginia
Evans, Nigel (Ribble Valley)


Bowden, Sir Andrew
Evans, Roger (Monmouth)


Bowis, John
Evennett, David


Boyson, Rt Hon Sir Rhodes
Faber, David


Brandreth, Gyles
Fabricant, Michael


Brazier, Julian
Fenner, Dame Peggy


Bright, Sir Graham
Field, Barry (Isle of Wight)


Brooke, Rt Hon Peter
Fishburn, Dudley


Brown, M (Brigg & Cl'thorpes)
Forman, Nigel


Browning, Mrs Angela
Forth, Eric


Bruce, Ian (Dorset)
Fowler, Rt Hon Sir Norman


Budgen, Nicholas
Fox, Dr Liam (Woodspring)


Burns, Simon
Fox, Sir Marcus (Shipley)


Burt, Alistair
Freeman, Rt Hon Roger


Butcher, John
French, Douglas


Butler, Peter
Gale, Roger


Butterfill, John
Gallie, Phil


Carlisle, John (Luton North)
Gardiner, Sir George


Carlisle, Sir Kenneth (Lincoln)
Garel-Jones, Rt Hon Tristan


Carrington, Matthew
Garnier, Edward


Carttiss, Michael
Gill, Christopher


Cash, William
Gillan, Cheryl


Channon, Rt Hon Paul
Goodlad, Rt Hon Alastair


Chapman, Sir Sydney
Goodson-Wickes, Dr Charles


Churchill, Mr
Gorman, Mrs Teresa


Clappison, James
Gorst, Sir John


Clark, Dr Michael (Rochford)
Grant, Sir A (SW Cambs)


Clarke, Rt Hon Kenneth (Ru'clif)
Greenway, Harry (Ealing N)





Greenway, John (Ryedale)
Martin, David (Portsmouth S)


Griffiths, Peter (Portsmouth, N)
Mates, Michael


Grylls, Sir Michael
Mawhinney, Rt Hon Dr Brian


Gummer, Rt Hon John Selwyn
Mellor, Rt Hon David


Hague, Rt Hon William
Merchant, Piers


Hamilton, Rt Hon Sir Archibald
Mills, Iain


Hamilton, Neil (Tatton)
Mitchell, Andrew (Gedling)


Hampson, Dr Keith
Mitchell, Sir David (NW Hants)


Hanley, Rt Hon Jeremy
Moate, Sir Roger


Hannan, Sir John
Monro, Rt Hon Sir Hector


Hargreaves, Andrew
Montgomery, Sir Fergus


Harris, David
Moss, Malcolm


Haselhurst, Sir Alan
Needham, Rt Hon Richard


Hawkins, Nick
Nelson, Anthony


Hawksley, Warren
Neubert, Sir Michael


Hayes, Jerry
Newton, Rt Hon Tony


Heald, Oliver
Nicholls, Patrick


Heath, Rt Hon Sir Edward
Nicholson, David (Taunton)


Heathcoat-Amory, David
Norris, Steve


Hendry, Charles
Onslow, Rt Hon Sir Cranley


Hicks, Robert
Oppenheim, Phillip


Higgins, Rt Hon Sir Terence
Ottaway, Richard


Hill, James (Southampton Test)
Page, Richard


Hogg, Rt Hon Douglas (G'tham)
Paice, James


Horam, John
Patnick, Sir Irvine


Hordern, Rt Hon Sir Peter
Patten, Rt Hon John


Howard, Rt Hon Michael
Pattie, Rt Hon Sir Geoffrey


Howell, Rt Hon David (G'dford)
Pawsey, James


Howell, Sir Ralph (N Norfolk)
Peacock, Mrs Elizabeth


Hughes, Robert G (Harrow W)
Pickles, Eric


Hunt, Rt Hon David (Wirral W)
Porter, Barry (Wirral S)


Hunt, Sir John (Ravensbourne)
Porter, David (Waveney)


Hunter, Andrew
Portillo, Rt Hon Michael


Hurd, Rt Hon Douglas
Powell, William (Corby)


Jack, Michael
Rathbone, Tim


Jenkin, Bernard
Redwood, Rt Hon John


Jessel, Toby
Renton, Rt Hon Tim


Jones, Gwilym (Cardiff N)
Richards, Rod


Jones, Robert B (W Hertfdshr)
Riddick, Graham


Kellett-Bowman, Dame Elaine
Rifkind, Rt Hon Malcolm


Key, Robert
Robathan, Andrew


King, Rt Hon Tom
Roberts, Rt Hon Sir Wyn


Kirkhope, Timothy
Robertson, Raymond S.


Knapman, Roger
Robinson, Mark (Somerton)


Knight, Mrs Angela (Erewash)
Roe, Mrs Marion (Broxbourne)


Knight, Rt Hon Greg (Derby N)
Rowe, Andrew (Mid Kent)


Knight, Dame Jill (Bir'm E'st'n)
Rumbold, Rt Hon Dame Angela


Knox, Sir David
Ryder, Rt Hon Richard


Kynoch, George (Kincardine)
Sackville, Tom


Lait, Mrs Jacqui
Sainsbury, Rt Hon Sir Timothy


Lamont, Rt Hon Norman
Scott, Rt Hon Sir Nicholas


Lang, Rt Hon Ian
Shaw, David (Dover)


Lawrence, Sir Ivan
Shaw, Sir Giles (Pudsey)


Legg, Barry
Shephard, Rt Hon Gillian


Leigh, Edward
Shepherd, Sir Colin (Hereford)


Lennox-Boyd, Sir Mark
Shepherd, Richard (Aldridge)


Lester, Sir James (Broxtowe)
Sims, Roger


Lidington, David
Skeet, Sir Trevor


Lilley, Rt Hon Peter
Smith, Sir Dudley (Warwick)


Lloyd, Rt Hon Sir Peter (Fareham)
Soames, Nicholas


Lord, Michael
Spencer, Sir Derek


Luff, Peter
Spicer, Sir James (W Dorset)


Lyell, Rt Hon Sir Nicholas
Spicer, Sir Michael (S Worcs)


MacGregor, Rt Hon John
Spink, Dr Robert


MacKay, Andrew
Spring, Richard


Maclean, Rt Hon David
Sproat, Iain


McLoughlin, Patrick
Squire, Robin (Hornchurch)


McNair-Wilson, Sir Patrick
Stanley, Rt Hon Sir John


Madel, Sir David
Steen, Anthony


Maitland, Lady Olga
Stephen, Michael


Malone, Gerald
Stern, Michael


Mans, Keith
Stewart, Allan


Marland, Paul
Sumberg, David


Marlow, Tony
Sweeney, Walter


Marshall, John (Hendon S)
Sykes, John


Marshall, Sir Michael (Arundel)
Tapsell, Sir Peter






Taylor, Ian (Esher)
Wardle, Charles (Bexhill)


Taylor, John M (Solihull)
Waterson, Nigel


Taylor, Sir Teddy (Southend, E)
Watts, John


Temple-Morris, Peter
Wells, Bowen


Thomason, Roy
Wheeler, Rt Hon Sir John


Thompson, Sir Donald (C'er V)
Whitney, Ray


Thompson, Patrick (Norwich N)
Whittingdale, John


Thornton, Sir Malcolm
Widdecombe, Ann


Thurnham, Peter
Wiggin, Sir Jerry


Townend, John (Bridlington)
Wilkinson, John


Townsend, Cyril D (Bexl'yh'th)
Willetts, David


Tracey, Richard
Wilshire, David


Tredinnick, David
Winterton, Nicholas (Macc'f'ld)


Trend, Michael
Wolfson, Mark


Trotter, Neville
Wood, Timothy


Twinn, Dr Ian
Yeo, Tim


Vaughan, Sir Gerard
Young, Rt Hon Sir George


Waldegrave, Rt Hon William



Walden, George
Tellers for the Noes:


Walker, Bill (N Tayside)
Mr. Derek Conway and


Waller, Gary
Mr. Gary Streeter.


Ward, John

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the higher water quality, the improved standards of service to consumers, the increased availability of information and the increased exports which have been achieved as a result of substantially higher levels of investment and the removal from political control of the water industry through privatisation in England and Wales; looks forward to improved services in Scotland from the new public water authorities; and contrasts this with the arbitrary cuts from the investment plans of the nationalised water companies by the last Labour Government, including the six month moratorium on the letting of new construction contracts.

Overseas Aid

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): I must inform the House that Madam Speaker has selected the amendment in the name of the Prime Minister.

Miss Joan Lestor: I beg to move,
That this House fully recognises and accepts the United Kingdom's share of global responsibility towards the elimination of poverty and calls on the Government to make steady and measurable progress towards honouring its pledge of the United Nations overseas aid target of 0.7 per cent. GNP; deplores the Government's failure to play a more central role in the delivery of multilateral aid, both within the EU and other multilateral organisations, and the damaging effects of its policy on the bilateral programme at a time when global poverty is increasing; and calls on the Government to establish an aid programme which is better equipped to meet the needs of the world's poor.
Some people may wonder why we have chosen overseas development as the subject for debate this evening. There has been no obvious recent Government announcement or policy change on which to peg this debate. No major international conference is being held this week that is directly relevant to the United Kingdom's aid budget. It is increasingly clear, however, to those of us who care about the UK's role in global development that the Tory Government are selling the British people and the world's poor short.
In a nutshell, the Government are prepared to trade short-term electoral bribes in the form of tax cuts at home against the development of an effective and sustainable aid programme throughout the world. That strategy, fed into the Chancellor's autumn statement last year, permeated two Government documents—the ODA's fundamental expenditure review and its senior management review, which I hope to address later.
I do not doubt for a moment that the Minister will mount a robust defence of the Government's track record. He will, no doubt, talk about quality as opposed to quantity; about supporting programmes that are recognisably British, as opposed to multilateral, in origin; and about the high regard afforded to British aid throughout the world. You see, Mr. Deputy Speaker, I have been reading the Minister's ODA press releases.
For all his claims, however, the Minister cannot disguise the fact that the Tory Government have demonstrated, and continue to demonstrate by their actions, that their overseas aid policy is morally, politically and intellectually bankrupt: morally, because by cutting aid—and the Government are cutting aid, make no mistake—they are demonstrating that they attach a low priority to the alleviation of poverty in developing countries; and, politically, because the cuts announced in the Budget were a crass response by erstwhile Tory liberals to the demands of the right. I am sure that the Chief Secretary to the Treasury found the world's poor to be a soft target.
Such actions grossly misjudge the mood of the British people, who have an admirable record of enthusiastically supporting appeals for help to the developing world. A Harris poll conducted last autumn revealed that 79 per cent. of those interviewed wanted the aid budget to stay the same or to be increased.

Mr. Nigel Forman: From what the hon. Lady is saying and from the Opposition


motion, it is clear that she will be focusing on official development assistance, and it is right that she should do so, but does she accept that that is a slightly monocular view? Are not private flows from this country to developing countries of great assistance to the development process?

Miss Lestor: I accept that there are private flows and they are very welcome, but I am talking about the Government's record, not other people's record. It cannot be right to say, as I presume the hon. Gentleman meant, that although the Government are failing in their responsibilities, other people are making up the deficiency. That is not the subject of the debate.
The Government's intellectual bankruptcy is striking. Their figures, in response to my recent parliamentary question, show that a mere 10.5 per cent. of British bilateral aid in 1994–95 was spent on basic needs. That is well short of the commitment to 20:20, to which the British Government signed at the social summit in Copenhagen in 1995. So much for focus on poverty.
I have no doubt that the Minister will claim that the Government's overseas development programme aims to reduce poverty, but such a claim simply does not tally with their economic and social agenda at home. In short, a poverty focused programme of investment and assistance abroad would be a very uncomfortable mismatch with the Government's approach to the alleviation of poverty in the United Kingdom.
The Opposition believe that the values of social justice and human solidarity are as relevant abroad as they are at home and that Britain has a clear moral obligation to help to combat poverty and alleviate suffering, wherever they occur. Unlike the Government, the Labour party has a vision of development that is coherent with its domestic policy, and which is rooted in traditional Labour ideals about fairness, rights and participation in society. We believe in the rights of people everywhere to a decent livelihood and the ideal of an international society in which we all benefit culturally and economically from development.
Nor is that a narrow vision of self-interest. Development can be about improving the global environment, reducing enforced economic migration, creating new export opportunities and reducing the threat of war. Those aims are to be welcomed, but the vision must be wider. It must be a vision of global inclusion, not exclusion, and of interdependence, partnership and mutual learning.
Visions need a practical anchor. What does our vision mean for the hard choices that face British development policy and especially British aid? How do we ensure that the ODA's claimed poverty focus is paramount? What does the ODA mean by poverty? Which forms of aid—project aid, programme aid, and aid delivered with the assistance of NGOs—are best suited to achieving significant and lasting reductions in global poverty? What are the implications of increased aid contributions to eastern Europe, the former Soviet Union and the Mediterranean for aid programmes in Africa and the Indian sub-continent? Have the Government decided that there should be a sharp geographical focus to the delivery of aid?
What should be Britain's role, as an active participant in the European Union and the United Nations, in the development of aid policy and aid delivery? Those are the

questions that people are asking and they demand thoughtful answers. If we do not receive such answers tonight, it will show that the Government have chosen to pursue a policy of cuts—to the bilateral programme and to the multilateral programme—as a result of which Britain's standing and influence in the world and its role as a leading provider of aid will take a hammering.
The Opposition are not prepared to stand by without comment to watch British Ministers abdicate their responsibility to the world's poor and cause lasting damage to them and to Britain's reputation. May we have an agreement that aid resources must be focused on the poorest people and the poorest countries? There must be no more Pergaus, for example. Will the Minister assure us that the channels for delivery of aid will be chosen specifically for their real impact on poverty? What evidence does the Minister have that different channels do better or worse at poverty reduction?
In recent years, we have seen a dramatic shift in the proportion of aid allocated away from project aid and towards emergency programmes. What efforts are being made to ensure that emergency aid is linked to and consistent with longer-term development objectives?
The main report on the fundamental expenditure review, which was published in December 1995, raises profound issues about the future role and work of the ODA. I was pleased to hear that the Minister proposes to make a statement to Parliament in the near future. I do not intend to discuss the report at great length today, but there should be no misunderstanding about the process. It is not, as the remit of the FER suggested, merely a search to improve the effectiveness of the ODA: the report is fundamentally about reducing what the ODA does. It is about cutting the aid budget still further, cutting aid projects and programmes and cutting British contributions to various UN agencies.
We support some proposals in the report, but they cannot be allowed to conceal the true nature of the exercise. It has been accurately described by leading NGOs as a "rationalisation of decline", and was described today by Christian Aid as
a mean policy to take us into the 21st century".
One of the issues raised in the FER report is the future of multilateral aid. Britain is, of course, a partner in several multilateral programmes. The search is in the EU for a new vision after Lomé. Following the Government's deplorable 23 per cent. cut to the European development fund in 1995, how does the Minister propose that Britain will be able to play a constructive role in the future of EU development programmes?
The Opposition want real improvements to EU aid and development programmes, especially in relation to poverty focus, participation and accountability. We endorse the recommendations of the Foreign Affairs Select Committee that the role for the British Government is
to engage with fellow member states and the Commission in seeking to develop a realistic framework for delivery of EU aid".
How can a Cabinet that contains the Secretary of State for Defence, the right hon. Member for Enfield, Southgate (Mr. Portillo), and the Secretary of State for Social Security, the right hon. Member for St. Albans (Mr. Lilley), possibly play the constructive role in European development policy that the Foreign Affairs Select Committee suggests?
Is the Minister seriously suggesting cuts to the United Nations Children's Fund and to the United Nations development programme? As the Minister will know, both programmes have recently undertaken reform and are among the most efficient in the UN system. I recently met the new executive director of UNICEF, Carol Bellamy. She is clearly someone of drive and enthusiasm who will continue to build on UNICEF's outstanding work on behalf of children worldwide. I know, too, that Ms Bellamy met the Prime Minister, who I understand was also impressed.
I fail to understand how Ministers can endorse the work of UN agencies, such as UNICEF, and at the same time undermine them by proposing to reduce their funding. That is the height of hypocrisy and the world's children will suffer as a result.
I understand that in my absence yesterday—I was speaking at a conference in Dunblane organised by the excellent Scottish Education and Action for Development organisation—the Minister made some interesting claims during parliamentary questions, which were so ably handled by my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). [HON. MEMBERS: "Hear, hear."] Well, do not praise him too much. The Minister's claims bear revisiting tonight because I have no doubt that they will form the nub of his response.
The Minister stated:
Britain's aid programme is the fifth largest in the world.
That may be true in money terms, but not as a percentage of gross national product. The Minister further admitted that the Government have an on-going commitment
to maintaining a large and effective aid programme".
The obvious implication is that he anticipates a slide down the league table. Given current expenditure plans, perhaps he is only being realistic.
In addition, my hon. Friend the Member for Carrick, Cumnock and Doon Valley rightly pointed out that Britain is in
13th place in the real terms of gross national product.
We share that position with Italy. That GNP figure is based on the latest available figure—1993—supplied by the British aid statistics annual report.
The current and future picture, however, is less clear. The fundamental expenditure review predicts a further reduction to 0.26 per cent. in 1997–98. As that was drafted before last year's budget cuts were announced, a more realistic figure would appear to be 0.25 per cent. Perhaps the Minister will deal with that when he speaks.
How far down that list is the Minister prepared to see us fall? Under the last Labour Government, the figure stood at 0.52 per cent. and was rising towards the UN target of 0.7 per cent. The longer the Conservative Government are in power, the steeper is the climb back to that target. In their first year of office, a Labour Government will start to reverse that decline.

Sir Ivan Lawrence: How much?

Miss Lestor: I will repeat the commitment.

Sir Ivan Lawrence: Amazing.

Miss Lestor: There is nothing amazing about it. A Labour Government will start to reverse that decline in

their first year of office.—[HON. MEMBERS: "Don't give way".] No one is trying to stand up. They are on their bottoms, mumbling, but they are not standing.

Mr. Forman: rose—

Miss Lestor: I have given way to the hon. Gentleman already—[HON. MEMBERS: "Ah!"] All right, I will give way.

Mr. Forman: Is the hon. Lady aware that any ratio that is a proportion of gross national product can be increased, if that is the Labour party's commitment, either by reducing GNP or increasing the aid budget? Which does she intend to do when she is in office?

Miss Lestor: The trouble with me is that as I get older I get kinder. Perhaps I should not have given way. I made it perfectly clear. We can be judged on our record. When we left office the figure stood at 0.52 per cent. and was rising towards target. The longer that the Government are in power, the steeper is the climb back to the target, but a Labour Government would start to reverse that decline in their first year in office.
I hope that I may now continue. Yesterday, I was rather taken aback by the Minister's bold admission that
There is no doubt that the bilateral programme will face reductions…we have admitted that—as we switch to multilateral aid."—[Official Report, 29 January 1996; Vol. 270, c. 637–38.]
Did I miss something, or was that the first time that a Minister has come clean about a deliberate policy to switch resources from the bilateral programme, which the Government claim to hold dear, to the multilateral programme? Only last autumn, the Chancellor of the Exchequer gave the bilateral programme a ringing endorsement, saying that
in a tight public spending round…the planned allocation for bilateral aid is likely to be little changed from that set out in last year's departmental report. British bilateral aid is internationally recognised for its high quality and for the substantial share going to the poorest countries in Africa and Asia, and that will continue."— [Official Report, 28 November 1995; Vol. 267, c. 1060–61]
We welcome that statement.>
The Prime Minister, no less, told us:
I intend to ensure that multilateral contributions do not swallow up bilateral aid."—[Official Report, 28 June 1995; Vol. 262, c. 262.]
Resources are to be switched, we are now told, from bilateral to multilateral programmes. Which statement is correct? I would be grateful for clarification. According to last year's ODA report, in any case, bilateral aid to Africa was set to fall by £17 million or 5 per cent. in real terms, bilateral aid to Asia and the Pacific by £25 million or 10.9 per cent., and the total bilateral budget by £102 million or 9.6 per cent. If that is what the Chancellor calls "little change", I would hate to see his idea of a substantial cut.
It is worth reminding the Minister that those are the very countries—our "traditional partners" as he called them yesterday—that he claimed Britain would not neglect.
One further matter puzzles me about the Minister's comments yesterday. If resources are to be "switched" from bilateral to multilateral programmes, how does that square with the
lower forecasts for this multilateral aid


to which the ODA budget press release last November referred? Is the Minister talking about a switch and a cut at the same time?
This country's contributions to the World bank, the European Union and the UN agencies are undoubtedly significant and it is important that Britain maintains its influence in the delivery of aid. How does the Minister justify our position among the G7 countries, or in the EU, on the basis of cuts to the overseas aid multilateral programmes—the 23 per cent. cut in the UK contribution to the European development fund, for example, and the threatened cuts to UN agencies and the United Nations development programme?
Taken with cuts at home to institutions with internationally recognised reputations, such as the BBC World Service and the British Council—the latter is due to suffer a 28 per cent. cut in its development grant in aid in the next three years—it is easy to see how an impartial observer could conclude that Britain is undertaking a structured withdrawal from its global responsibilities.
The British Council's dilemma bears closer study. The Government have gone on record, quite rightly, to support its work, describing it as the principal agency for cultural relations, yet, by cutting support funding without saying where future activities should be concentrated, Ministers are showing a cavalier attitude to the scope and focus of its activities.
Of course, aid is only one way, although a most significant one, in which poverty can be alleviated. The Government amendment refers to the debt burden, which shackles so many of the poor countries. We welcome the lead that the Government have taken on debt relief, but surely the Minister must acknowledge that the debt problem remains acute in a substantial number of countries. Opposition Members believe that the intolerable burden of debt that continues to be borne by many of the world's poorest countries is morally unacceptable and a serious barrier to their prospects of sustainable economic development.
The accounting costs of debt in regions such as Africa is the diversion of financial resources from capital investment, health care, education, sanitation and other essential services into the coffers of external creditors. The real cost, however, is paid by ordinary Africans in the form of higher infant mortality, poorer standards of nutrition, shorter life expectancy and increased illiteracy. I was glad to learn that a series of seminars have been arranged next week by the Debt Crisis Network to highlight that problem. I shall meet the people involved. Kenneth Kaunda, the ex-president of Zambia, is among those who will speak about the debt burden in parts of Africa.
There is an urgent need for a new international initiative to relieve the burden of debt, both bilateral and multilateral. We need to press for international agreement on an 80 per cent. write-off of official bilateral debt owed by the poorest countries, which is crippling them and their development. We must also consider the low-income countries, with more debt relief in that direction and, perhaps more important, talk to the World bank and to the IMF—as I hope to when I visit Washington shortly—about more resources to fund debt relief. Those actions would be of real help to countries that find themselves in an impossible position.
Responding to the needs of the world's poor requires not only intellectual vision but the moral and political courage to put it into action. The Government have demonstrated that they have neither. Labour has that vision. A Labour Government will have that moral and political courage.

The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
acknowledges the United Kingdom's important role in helping reduce poverty and suffering in poorer countries and commends the Government for maintaining a substantial and effective aid programme which is the fifth largest in the world; applauds the Government's intention to maintain a bilateral aid programme next year which will be as large as that which had been previously planned; welcomes the central role the United Kingdom plays in seeking to make multilateral aid more effective; and commends the Government for the increasing poverty focus of the aid programme and for the leading role it has played in seeking a comprehensive solution to the debt burden of the poorest countries.".
The United Kingdom's official aid programme is one of our greatest national assets. It is one of the main links that we have with many countries in the developing world and one of our main means of securing the principal goal of our foreign policy, which is a more prosperous and stable world. Together with the huge contribution made by British trade and investment and our notable efforts in relieving the debt burden of many developing countries, the aid programme plays a highly significant role in reducing poverty and suffering throughout the world.
The Government are fully committed to maintaining a substantial and effective aid programme. We are the sixth largest economy in the world in absolute terms, yet we have the fifth largest aid programme. The hon. Member for Eccles (Miss Lestor) kindly admitted that. Three of our G7 partners—the world's biggest economies—give more as a percentage of gross national product than we do, and three give less. Those figures ignore the crucial role played by the British private sector, which the hon. Lady was pleased to dismiss. When our aid flows are combined with private sector flows, our total contribution to the developing world exceeds the 1 per cent. target that the United Nations set as a benchmark. That is a significant achievement and one that we can be proud of.
At the same time, a responsible Government must balance the many and growing public expenditure priorities and demands. Our overriding goal is a more prosperous Britain with sound public finances. Hard choices have to be made.
Hon. Members are well aware that the total amount available for aid was reduced in the autumn statement by £124 million in 1996–97 compared with our previous plans. The aid budget will still be £2,154 million in 1996–97 and will grow to £2,201 million in 1997–98 and to £2,270 million in 1998–99. In that total, we expect bilateral aid in aggregate to be no less than we announced in the Foreign and Commonwealth Office departmental report last March. That is because a number of multilateral institutions are expected to spend less money in the immediate future than we had anticipated a year ago.
For example, the replenishment of the European bank now under discussion seems likely to involve a lower paid-in element and a longer period for disbursement than


we had forecast. The Asian and African Development banks have advised us of a slower rate of drawdown of existing pledges than they had forecast earlier. The reduction was made in the knowledge of those lower requirements. The European development fund has also advised us of reduced forecasts.
The new spending level represents a significant transfer of resources and shows that the Government have resisted the major cutbacks in aid that have affected so many other donors. The United States programme faces deep cuts; the Italians cut aid by 35 per cent. last year and the Canadians are cutting aid by 20 per cent. this year.
As the hon. Member for Eccles said earlier, volume is not everything; more important is impact. We have maintained a strong aid programme because aid works and because it is something that Britain does supremely well. Our Overseas Development Administration is internationally recognised as one of the most effective Government aid agencies in the world. Our bilateral programmes are among the most successful in bringing about a real transformation in the lives of the poor in the world's poorest countries. Britain's intellectual leadership in the institutions through which we spend our multilateral aid has been significant in ensuring that the British taxpayer's money is used efficiently and effectively.
However, the ODA could be even more effective. We have recently carried out a fundamental expenditure review, or FER, of its activities and organisation, to which the hon. Member for Eccles referred. That review was thorough and wide ranging. It involved consultations with non-governmental organisations, recipients of aid and others. Copies were sent before Christmas to the Libraries of both Houses. We are encouraging a debate about its findings. I suppose that the contribution of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) at Question Time yesterday could be said to add to that debate.
I am pleased to be able to explain some of the errors that people have made about the review. I shall explain what the review found and what the Government propose to do about the findings. The review concluded that there is a continuing need for the UK to provide substantial flows of concessional aid. It also recommended that we should clarify the purpose of the ODA's work by better defining the aid programme's basic goal and aims. The Government have accepted both those conclusions. We shall define the ODA's purpose as improving the quality of life of people in poorer countries by contributing to sustainable development and reducing poverty and suffering.

Mr. Tam Dalyell: If that is the aim, could special attention be paid to what is happening in one of the poorest countries, Nepal? A delegation led by the right hon. Member for Tonbridge and Malling (Sir J. Stanley) visited the research station at Lumle, where there may be cuts, about which the right hon. Gentleman and I met the Minister, Lady Chalker. Could special attention be paid to the issues involved in that?

Mr. Hanley: Yes, certainly. My right hon. and noble Friend the Minister for Overseas Development referred the matter to me when I met our high commissioner from Nepal only last week. I shall consider the matter and reply, if I can, by the end of the debate.
We accepted the main conclusions of the FER. We shall support the four principal aims that relate to the FER: good government and economic reforms; human resource development; the productive sector and the environment; and our stewardship of multilateral development institutions and the development aspects of wider economic policies.

Mr. Andrew Rowe: Within those aims, will my right hon. Friend do his best to ensure that fair distribution methods are adopted for the aid? For example, a high proportion of aid-assisted students in Britain come from a tiny elite that uses the aid as a sort of patronage that bears little relationship to fair distribution. That is just one example of the difficulties—which I realise that any aid programme will have.

Mr. Hanley: My hon. Friend raises an important point. We are proud of the fact that some 9,500 students and trainees were supported under the aid programme in 1994–95. Other training schemes exist. We have special schemes not only for the Commonwealth but for all overseas students in the United Kingdom. The number of overseas students in higher and further education in the UK has more than doubled in the past decade, from 50,000 to 123,000. I realise that my hon. Friend is talking about the distribution of the benefits of that programme. I shall certainly examine that matter, with reference to what he said.
The hon. Member for Eccles also referred to where we shall spend bilateral aid in future. The FER recommended that we concentrate further our country programmes. That policy has been evolving for some time, has the full support of many NGOs and is being pursued by other advanced donors.
The starting point for any debate has to be that the ODA is working in more countries than ever before and undertaking more complex activities. New demands have arisen because of the collapse of communism and the need to help the countries of eastern Europe and the former Soviet Union as they move towards market economies and full democracy.
It does not make sense in the long term to retain such a widespread network of aid activities, because the world is changing. Many countries are graduating out of aid. Some of the countries of east Asia are becoming donors themselves. We expect that in the medium term, many of the countries of central Europe will simply not need aid programmes as such. Concentrating a greater share of country programmes on a limited number of recipients that both need aid and can put it to good use will help to raise the quality of bilateral aid. It will also help to increase the poverty focus of the programmes, which is our most important goal.
The development indicators for need are worst for sub-Saharan Africa and south Asia. They contain the vast majority of the world's very poor countries. We also have much influence in those regions, which is why our aim is to concentrate aid increasingly on them. That does not mean that we shall abandon countries where our support is still needed. There is still much to be done, for example, in helping eastern Europe and the former Soviet Union and the countries of the Caribbean. We have a strong commitment to the dependent territories that still need our aid.
As I said, some countries will graduate from aid when conditions are right, just as Korea and Singapore have. We shall continue small programmes in most cases through British partnership schemes and scholarships. Many countries will continue to benefit from the substantial contributions that we give multilaterally.

Ms Diane Abbott: Will the review result in cuts in aid to the Caribbean?

Mr. Hanley: We have still to decide on the amounts to be given to various countries. We must also see whether, in the regions that I described, the amount of aid needed can be used effectively and efficiently. The Caribbean will certainly put its case to us with its usual enthusiasm. Although I cannot make commitments at this point because matters are still being discussed, we shall not abandon countries that definitely need our support.
A greater concentration of substantial bilateral programmes will be progressively achieved. Last year, 70 per cent. of bilateral aid went to the 20 largest recipients. We aim to increase that concentration ratio gradually over the years. We shall do so very gradually, not radically as the hon. Member for Carrick, Cumnock and Doon Valley suggested yesterday. Although concentration countries will not necessarily be the same from year to year, the key is how effective our partnership is in ensuring that the aid is used effectively. I hope that my explanation of that important aspect of the FER will dispel fears generated by the media that aid will be limited to only 20 countries. That is simply not true. While we shall target better a limited number of large programmes, many other countries will continue to receive aid, too.

Mr. Forman: I applaud the policy of concentrating and focusing aid. Will there be a degree of what I might describe as "Commonwealth preference" in that policy? Many countries with the greatest concentrations of poor people happen to be in the Commonwealth.

Mr. Hanley: My hon. Friend is right to say that we have a continuing interest in and commitment to the other countries within the Commonwealth. I shall discuss the matter with my right hon. and noble Friend the Minister for Overseas Development, but I believe that the case for aid will be on a country-by-country basis, and I would not expect an overt preference for Commonwealth countries. Preference will be given to countries in need. However, I shall look at the issue and write to my hon. Friend with the answer, which my right hon. and noble Friend might be able to give when she returns from Africa.

Mr. Alan W. Williams: The Minister keeps saying that countries will graduate out of aid and that the Government will be increasingly selective about which countries should receive aid. Does that mean that, looking to the future, the Government have abandoned the 0.7 per cent. target that was restated in the 1992 Rio summit as being desperately needed by the world's poor countries?

Mr. Hanley: No, we have not abandoned our goal of 0.7 per cent. We continue to hold that objective when funds allow. We are at 0.31 per cent. and diminishing by a small amount because we are ensuring that our economy is strong enough for us to achieve the 0.7 per cent. in time.
I have been explaining how our bilateral aid will be better targeted in the future. The FER also had important things to say about the growing contribution that we make through multilateral aid. This year, multilateral contributions are set to exceed bilateral programmes for the first time, almost entirely because of rising contributions to the European Commission's aid programme. More of our multilateral aid goes through the EC than through any other channel—about £600 million last year.
The multilateral share of our aid is set to increase further, although, as I explained, the rate of increase is less than previously forecast. The ODA will need to put more of its effort into improving the quality of multilateral aid and exploiting opportunities to use it to support UK interests and priorities.
The FER is also clear about that. It recommends that the ODA adopt a high-level aim that relates directly to its multilateral aid work. The objective is to make multilateral aid more explicitly subject to the same strategic disciplines as bilateral aid. For example, we shall strengthen the ODA's capability to influence the European Community's development operations.
Strategies for the main areas of multilateral aid will be produced regularly, to ensure that the ODA's control over the uses to which multilateral aid is put is reinforced. There is no question of the UK being less committed to the multilateral aid system. We have been at the forefront of attempts to make multilateral aid more effective. In the European Union, we have pressed for closer co-ordination among member states; in the United Nations, we have contributed valuable ideas on management reform; and we are beginning to make headway in promoting reform in a number of agencies.
But the World bank group of institutions is at the centre of the global development effort. The World bank group's objectives and the ODA's aims are closely linked. The institutions' quality is reflected in the richness of their collective experience and their record of success. The UK will continue to give them our full support. In particular, we want to see a substantial eleventh replenishment of the International Development Association.
The hon. Member for Eccles seemed to be surprised that we were shifting from bilateral to multilateral aid. On the contrary, it is well known and will continue for some time. As I have said in the House before, a high proportion of our multilateral aid spending is determined by negotiated or assessed international commitments. The size of the EC aid budget is decided by all member states acting together, and by the European Parliament. The UK does not have sole control, but the ceilings were set at the 1992 European Council in Edinburgh. We are in the middle of that shift, although the ratio of bilateral to multilateral aid is currently approximately 50:50. Last year the ratio was 60:40. The shift should be seen within the total aid that we can produce.
We can also be proud of our record on developing country debt. We have taken the leading international role in seeking a comprehensive solution to the official bilateral and multilateral debt burdens of the poorest, most heavily indebted countries and have written off more than £1.2 billion of their aid debts. Twelve countries have now benefited from the higher rates of debt relief—67 per cent. in some cases—available at the Paris Club of Government


creditors under the Naples terms first proposed by my right hon. Friend the Prime Minister when he was Chancellor. Since December 1994, more than £2.5 billion of bilateral official debt has been restructured on Naples terms. We have gained widespread recognition that additional measures must be taken to deal with the multilateral debt burden of a number of the poorest countries. In response, the International Monetary Fund and the World bank have agreed to submit such proposals at their spring meetings in April 1996.
The UK will continue to be at the forefront of international thinking, policy and action on development. We shall maintain strong programmes of research, which underpin our capacity to influence others and promote effective development. We have announced a further increase next year in our joint funding scheme for non-governmental organisations, and we shall continue to support the societies that send British volunteers abroad at a substantial level. The Commonwealth Development Corporation expects to expand its annual level of commitments by some 12 per cent.
We shall continue to respond to humanitarian emergencies, building on the outstandingly successful work of British experts and non-governmental organisations, which we have supported to great effect in Bosnia, Rwanda and elsewhere. We are putting increased effort into the role of aid, both in conflict prevention and in promoting a long-term approach to complex emergencies. The aim is to encourage the return to development, and we are beginning to see the fruits of that approach in several parts of Africa.
Opposition noise about public expenditure reductions obscures the fact that we expect to deliver a bilateral aid programme no less substantial in aggregate than we had planned before the reductions. That programme will be increasingly concentrated on those who need it most and can use it most effectively. I am proud of our aid programme; the Government are proud of their aid programme; and I commend the Government's amendment to the House.

Mr. Robert Hughes: Cuts in the overseas aid budget are to be deplored, and it does the debate no good when people say that other countries, such as the United States or even Canada, have cut their aid budgets even more than we have. Such comparisons are odious, and no answer to the problem.
Ministers talk about the great advantages of the flow of private capital in development. Private capital can be an aid to development, but I have never known it to be altruistic. Private capital goes overseas and to the underdeveloped world because it believes that it can obtain a good return. It is bogus, therefore, to include private capital inflows to developing countries in the category of aid.
I accept that overseas aid policy must have clear objectives and must be geared to countries in greater need. Of course we want aid to be directed to sustainable development and of course we want to lead countries out of need for aid, although I have never subscribed to the opinion which is held in some parts of the House, especially on the Conservative Benches, that there is an aid-dependency culture in some countries. No country wants its development to be held back simply to obtain aid.
I do not subscribe to the theory that a good aid policy depends on our self-interest. We benefit from overseas aid, but that should not be the primary reason to provide development aid. We have a responsibility to ensure that aid policy, whether multilateral or bilateral, helps the people in the greatest need and is directed to countries in whose future we have a direct interest and influence. The Minister conceded that one of the Government's aims would be to give aid where there is a possibility of influencing development.
Aid is desperately needed in Angola. I understand that in the next couple of weeks Baroness Chalker is to go to Angola. When she does so, she should remember that the United Kingdom was involved in the peace process which sought to bring to an end two decades of civil war and culminated in the Lusaka protocol in November 1994. Yet after all that time, more than a year later, the peace process is in serious danger. It hangs in the balance.
The United Nations Security Council will meet on 8 February 1996 to decide the future of the UN mission in Angola. The United States is making noises to the effect that it is fed up with the situation and wants to walk away from the problem. We know, however, that one of the reasons for the difficulty in the peace process is the behaviour of the United States' surrogate, Jonas Savimbi of UNITA.
At the donor conference in September 1995, attention was drawn to the fact that, according to estimates by the United Nations children's fund, almost one in three children in Angola dies before reaching the age of five; 280,000 Angolans live as refugees in neighbouring states; only 41 per cent. of the population has access to safe drinking water; the urban population has increased from 15 per cent. in 1970 to about 50 per cent. in 1995 as people have fled the country because of the war; life expectancy for Angolans is 45 years.
Having heard those statements, anyone would say, "That country needs assistance." Yet at the round table donor conference in September last year, although the United States pledged $190 million to the reconstruction fund, France pledged $140 million and the Netherlands pledged $60 million, Britain fail to donate a single dollar, a single penny. The reason was that at the time the Government were busily involved in the argument about the further expenditure review. It is disgraceful that the Government of a country so closely interlinked and involved in the peace process, and in the pressure on the Angolan Government to concede massively to UNITA, should stand back and refuse to give any money. If Angola is to have a real future, Baroness Chalker—one of whose responsibilities is to participate in that type of argument—must tell the United States to make it clear that Savimbi must keep to the agreements that have been signed. There is a massive wish in Angola for peace. The peace process needs to be confirmed and money needs to be given.
Governments influence overseas aid and overseas development policy in many ways. Cash is important—I do not deny that—but giving cash makes no sense if the Government's negotiations on trade matters can negate the entire development policy. I draw the Government's attention to the trade negotiations between South Africa and the European Union. Things are at a crucial stage.
For years, every hon. Member said, with equal sincerity—I would not want to recall the past and quarrel with people who held a different view from me at the time—that we wanted the end of apartheid. We all said that we wanted a democratic Government in place in South Africa. We wanted that, not only because it was a theoretical democratic exercise, but because we wanted significant development for the people in southern Africa. None the less, the negotiations have stalled as a result of the way in which the European Union is approaching them.
Detailed discussions finally started in December 1995, after a long period of pre-negotiations. It is almost two years since the Berlin conference to discuss the relationship between South Africa and the European Union. Negotiations are in danger of stalling because France, supported by Germany and some southern European countries, is drawing up a list of "sensitive" products to be excluded from the negotiations. A list is accumulating, and circulating among member states, of products amounting to 58 per cent. of South Africa's agricultural exports to the European Union. What is more, it has now been suggested that before negotiations can be completed, "impact assessments" should be made of the impact on the European market, not only of potential South African produce, but of free trade agreements in general. Those may cause enormous delays.
The Italians, who currently hold the presidency of the European Union, believe that they can achieve a deal that can be signed during their presidency. If that is to happen, it is imperative that the United Kingdom pulls out all the stops to urge the other EU member states to allow a speedy start to the detailed talks and to resist a growing protectionist momentum against South Africa.
Although some minor trade concessions were made last year, the European Union gives South Africa a worse deal than most countries outside the western world, including many with a higher per capita income. South Africa is often said to be a rich country, but it has an extremely low per capita income. About 58 per cent. of its population is illiterate. There is desperate unemployment.
Those things must be considered in the round. Development policy is not a simple matter of bandying around figures to say that this will work this way and that will work that way. It is about real people in real situations. I hope that in discussing overseas aid policy the Minister and Baroness Chalker will not take a monocular view, as the hon. Member for Carshalton and Wallington (Mr. Forman) eloquently put it. I hope that they will not adopt tunnel vision and seek to defend their policy, or to make progress with their policy only in the narrow sense of percentages of gross domestic product. Those are important, but they are not the whole story.
It is not good enough for the Government to say, "We aim eventually to reach the UN target figure, but in the meantime we shall go backwards until we can afford it." This country can certainly afford it, and I believe that the vast majority of people in the country would be willing to contemplate an increase in our monetary programme. I hope that the Department is not isolated but is able to influence wider foreign policy. Otherwise, the whole mess will collapse like a pack of cards. It will not matter from the point of view of our influence, but the most

desperately needy—the men, women and children who depend on the sensible progress of our aid policy—will be the ones who suffer.

Sir Mark Lennox-Boyd: I am pleased to follow the hon. Member for Aberdeen, North (Mr. Hughes), who made several comments with which I agree. I shall refer to the issue of national self-interest, which he touched upon, in my short remarks.
I had the great privilege to be a Foreign Office Minister for four years, and for two of those years I answered for the Overseas Development Administration in this place. I was enormously impressed by the quality of the British aid programme and by the quality of advice that I received as Minister defending the Government's policies. I am pleased that some of those who advised me are present today and I note from the tabulations attached to my right hon. Friend's brief that he receives the same fulsome advice. Although I worked extremely hard, I must confess that sometimes it was rather like boxing with one's eyes blindfolded. I hope that my right hon. Friend does not feel the same way.
I welcome the aid programme because I see it as an extension of the British diplomatic initiative—the British interest. Those who criticise the aid programme because they do not believe in aid or because they believe in charity more than the British national interest should consider the Japanese position. Japan's aid programme is about four times as large as ours in money terms.

Mr. George Foulkes: Hear, hear.

Sir Mark Lennox-Boyd: Japan's aid programme is smaller than ours as a percentage of gross national product, so perhaps the hon. Gentleman should temper his enthusiasm to support his hon. Friend the Member for Eccles (Miss Lestor), who opened for the Opposition.
When the Japanese give aid, the four-wheel drive vehicles and other manifestations of Japanese commercial clout arrive shortly afterwards. I believe that the attitude of most decent people in Britain to aid is a reflection of their attitude to the conduct of their lives: they are mindful of their own self-interest while doing what they can afford to help others. When it comes to aid, I sometimes wish that the Opposition would recognise that self-interest is no bad thing. The hon. Member for Aberdeen, North touched on that issue in his speech. Of course it is not a primary objective of our aid programme, but I believe that it must be given greater emphasis.
Opposition spokesmen often seem to be in the grip of non-governmental organisations, such as those involved in the World Development Movement, which deny the national self-interest. On occasion, I feel that Opposition speeches are not directed to the House and to the nation, but to the NGOs to which I have referred.
The British aid programme is a good programme because it is targeted largely at the poorest countries; I do not wish to see that change. However, I am a strong supporter of the aid and trade provision and I believe that everything about that concept should be encouraged. I am sorry that my right hon. Friend Baroness Chalker and her colleagues in another place found it necessary to cut the ATP this year in their fundamental expenditure review


and that it will be cut further. I am greatly disquieted by Labour party proposals, which lack any substance or detail, to reform the provision still further if Labour were elected to Government.
There can be nothing wrong in principle with development projects which are proposed by British companies. I cannot accept the view expressed by the World Development Movement that the aid for trade provision should be abolished. I think that that would be insane. In that context, I shall comment about the Pergau experience because I believe that my criticisms of the Opposition were characterised by Labour Members behaviour on that occasion. When it was all over, the Foreign Secretary said:
We must ensure that British companies are not disadvantaged in bidding for worthwhile development projects against competitors who can afford soft finance".
I wholly agree with that. Whatever mistakes were made during the Pergau episode were made in good faith by Ministers acting in the national self-interest. However, we heard only howls of indignation from Opposition Members, which showed that they were more concerned about pleasing those who get at them in the Lobbies than about supporting our national self-interest.

Ms Abbott: No Labour Member would argue against the Government providing soft finance for private companies bidding for projects, but we do not regard it as an appropriate use of money that the British public believe is being spent on aid.

Sir Mark Lennox-Boyd: I hope that the hon. Lady will provide more details, if she intends to make a contribution to the debate, about what she wants to be done about aid and trade provision. I shall be interested in what she says because I believe that arguments in favour of aid provision which do not also favour national self-interest are unlikely to enjoy public support. Anyone who wants the aid budget to increase—I include in that category the hon. Member for Hackney, North and Stoke Newington (Mrs. Abbott) and the World Development Movement—must realise that my constituents will be easily persuaded that aid provision should be increased only if the argument for increased aid is combined with national self-interest.
Because I believe that the national commercial and diplomatic self-interest must be served by the aid programme where possible and reasonable, I shall comment on multilateral aid provision and the European Union.
The hon. Member for Aberdeen, North referred to trade relations between South Africa and the European Union and I heartily agree with what he said. It is absurd that the European Union should make selfish provisions of the kind to which he referred and I found his contribution most helpful and illuminating. It is a cause of great irritation to many of us that so much of our aid is diverted from our bilateral programme to multilateral aid, particularly into the European Union, where we contribute about one sixth of its expenditure from our bilateral aid. I was pleased to hear my right hon. Friend the Minister say that negotiations will be hastened in an effort to improve the European multilateral programme.
It has always seemed curious to me that the European Union should have an aid programme. I cannot see why it should in principle, but nonetheless I recognise that it is a matter of history and that my right hon. Friend and his colleagues have more important arguments to pursue within the European Union. However, as a former Foreign Office Minister, I recall one incident involving the chief minister of a Caribbean dependent territory who was anxious to build an education college in his country—which undoubtedly would have been named after him and boosted his ego. I received advice, which I was happy to accept, that it was an extravagant and not particularly worthwhile initiative in aid terms and we refused to grant aid. The chief minister in question—the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) knows to whom I refer—then went to the local European Union representative and his request was approved.
Although I am aware of my irritation regarding many aspects of the European aid programme, I know that Britain is more successful than many other countries in obtaining contracts for our non-governmental organisations and consultants out of multilateral programmes. We benefit from spending multilateral aid on organisations originating in Britain. That is very good news indeed. Here I declare an interest as I was an observer at the recent Palestinian elections, under the auspices of the monitoring exercise organised by the European Union. The hon. Member for Eccles declared in her opening remarks that British influence is taking a hammering. If she had observed the Palestinian elections, she would have found that to be profoundly untrue. I have some reservations about the size of the European operation and other matters, but I shall not dwell on that aspect today as I wish to congratulate the British people involved.
Four of the 30 European Union administrators were British and they were in a position of great influence; we had six long-term observers and our effort—especially that of one British administrator, who is an expert in organising elections throughout the world—helped the Palestinians to design their electoral system. British officials spent several months with leading Palestinians, who were deeply grateful for their advice. That involvement was a great success for the European Union and for the United Kingdom at little cost to ourselves, and as Palestine emerges as a nation we shall certainly benefit from our participation.
We shall also benefit from our aid programme to the Palestinians. Over the next three years, the British contribution, which is substantially but not exclusively funded through the European Union, will be about £80 million. It is quite a large programme for a small emerging country and that initiative will do our standing with the Palestinian people even more good.
There are several small programmes such as those in sewerage and public health; there is a mini know-how programme and a Bank of England initiative to help the Palestinians set up a monetary authority. They are small schemes and, once again, they are extremely well targeted, fashioned and constructed and they will put our officials in contact with leading Palestinians. I believe that those initiatives will follow the principle that I have enunciated in that they will be good for the Palestinian people and the British self-interest.

Miss Emma Nicholson: I am pleased to follow the hon. Member for Morecambe and Lunesdale (Sir M. Lennox-Boyd). I well remember his fine work when he was a Minister. I am sad, however, that the chance to speak on Britain's overseas aid programme has been provided by budget cuts. I support the retention and expansion of the current budget which was so well managed for so long by Baroness Chalker.
On behalf of the Liberal Democrats, I thank the Labour Front-Bench spokesmen for their recognition in the motion of the value of British aid, and the hon. Member for Eccles (Miss Lestor) for her fine and moving speech. My colleagues and I share their dismay at the Government's continual reduction in targeted assistance to the poorest of the poor. I consider that part and parcel of the Government's deliberate ignorance of the plight of the most needy people, domestically and overseas.

Mr. David Faber: Does the hon. Lady recall what she said on 19 June last year in response to the speech of the hon. Member for Truro (Mr. Taylor), who is now her hon. Friend? She said:
Despite the passionate commitment of those hon. Members, they were just rotating old and outdated statements that bore little relationship to the reality of today's overseas aid programme".— [Official Report, 19 June 1995; Vol. 262, c. 109.]
Does she still agree with her words then?

Miss Nicholson: Yes. That was before the current budget cuts. I supported the Government on this and many other matters last summer and last autumn and I am desperately sad that my loyalty and my belief in the value of statements by Ministers and supporters have been rubbished by their actions. I am delighted that the hon. Gentleman raised that point.
My personal experience of the effectiveness of British official aid spans three decades: first, as a volunteer in India and Africa; secondly, as a salaried member of staff of the Save the Children Fund and other organisations such as Plan International; and, thirdly, since I entered Parliament, as a volunteer again. I have considerable experience in these matters.
What is the purpose of government aid? We all know the Government's main stated aims. They are to support economic reform, to enhance productive capacity, to help achieve good government, to finance activities directly benefiting poor people, to promote human development, to promote the status of women and to help to tackle environmental problems. We all agree with those aims, but are the Government giving the Department the tools to do its job?
Until last autumn, Britain's performance was not brilliant, but at least there were small increases in aid spending in 1994. Plans were also approved for further small increases for 1997–98. We were the fifth largest aid donor, but our contribution was less than half that of No. 4 on the list—Germany. In 1994, we spent 0.31 per cent. of our GNP on aid. We were 12th equal with Finland and below such countries as Luxembourg, Switzerland and Portugal. Neither the scale of our aid nor our aid-GNP ranking reflected our strong and special bilateral links with many of the world' poorest countries, unlike donors such as Sweden and Luxembourg.
The stated objective of the former Foreign Secretary was to punch above our weight. To do that, we need to concentrate on our strengths. Our bilateral experience and long expertise give British aid its quality and make our voice on development matters universally respected and more important than those of many other countries.
Even with the planned increases in 1994, our bilateral aid was set to shrink from £1.1 billion to £945 million by 1997–98. Bilateral aid to Africa alone was to fall from £318 million to £280 million in only two years. Yet much of that money is still needed to support economic reform and good governance—two of the Government's main aims.
The aid cuts announced last November, far from modestly increasing the aid budget for 1996–97 and 1997–98, will cut spending to significantly below even this year's spending. In each year, more than £120 million has been axed from previous years' spending, representing a cut of about 9 per cent. in the amount expected to be spent in the last financial year. At 1994–95 prices, the cost will be at least –200 million in each of the next two years, compared with the total for 1994–95. That is more than two thirds of total private United Kingdom aid flows.
First, is it true that nearly all that money will have to come from bilateral aid? Secondly, as fast-spending aid to support economic reform and good governance is the easiest to cut, what impact will those cuts have on our leverage in pursuit of those aims, especially in Africa? How much will go to Africa in 1997–98?
The Government's aim to help the poor—especially women—has wide public support. It is carried out in partnership with excellent British voluntary agencies such as Oxfam, Plan International and the Save the Children Fund. Plan International has Ian Buist, a former ODA eminence, as a director. Can the Minister assure us that previous plans for the joint funding scheme and other partnerships with such agencies will not be affected by the cuts? What about our contributions to the United Nations Children's Fund—UNICEF—whose concerns loom large?
The Minister stated this evening that he wishes to improve the quality of multilateral aid, but how do the Government expect to maintain Britain's influence in the multilateral aid agencies, including the European Union, if they take the axe to our bilateral programmes? Who will listen to us if we do not put our money where our mouth is?
During the previous financial year, the Government said that when many major donors face difficult decisions about the size of their aid programmes, the increase in the United Kingdom's aid programme reconfirms the Government's commitment to international developments. I deeply regret the fact that, by this year's decisions, so soon afterwards, they have trampled that commitment into the dust.
The fundamental expenditure review, the FER, changes ODA priorities. It drops the unique focus on women, yet women and their children make up 80 per cent. of all refugees and displaced people. Is the Minister content that that should happen, given that in the poorest societies women and girls bear the heaviest burdens of illiteracy and hunger, as well as child labour?
The review focuses a higher proportion of expenditure—85 per cent.—on only 20 countries. Is the Minister comfortable with the fact that in many mid-level


economies, and even in wealthy nations, where millions of refugees eke out their lives, sometimes for 30 years, the official British attitude will now be survival of the fittest? Surely he must know that no GNP statistic allows for vicious or ignorant social policies and that high national wealth does not lead to automatic redistribution or to tolerance towards minorities. Aid is about people, not about classroom economics. The Government have turned their face against asylum seekers coming into the United Kingdom. Surely the Minister knows that funds spent preventively in difficult regions help people to stay at home.
Given the fundamental changes of focus that the FER recommends, will the Minister refer proposals to the House for debate rather than take decisions within the Department? That would restore a sense of political balance that is sorely missing. Opposition Members have always taken overseas aid more seriously than the Government. In 1979, the Labour Government were spending 0.5 per cent. of GNP on aid. The forecast within the FER, before budgetary cuts were known, was that the percentage would fall to 0.26 per cent. The percentage must now be lower still.
The first ODA Minister, Barbara Castle, went into the Cabinet on 18 October 1964. Lynda Chalker still waits outside the door.
Recently, there was comment on Japan. It spends 0.29 per cent. of its GNP on aid. That is a higher percentage than was forecast for the United Kingdom before the budgetary cuts. That is not good.
Sadly, UNESCO has been badly weakened because it lost more than one third of its financial resources after the withdrawal of the United Kingdom and the United States 11 or 12 years ago. They have denied it their full co-operation. Its director-general, Dr. Federico Mayor Zaragoza, made that very point to one of the Minister's colleagues when he came here last December for the 50th anniversary of both UNESCO and the United Nations. It is clear that multilateral co-operation between rich and poor countries is not one of the Government's top priorities.
At the same time, we need a global perspective of participatory knowledge about a changing planet, co-operation in the advance of scientific understanding, the selection of appropriate uses of technology and the social and economic implications of the information-communications revolution, which are critical. We must take account of all those factors and their effect on cultural creativity and development, which will be denied to poorer nations unless the United Kingdom and the United States participate.
If the Minister does not know the facts, let him say so. The World Service debate recently revealed Government ignorance. The Foreign Secretary claimed credit for the Government in introducing the Rwanda service, the Kinyarwanda-Kirundi lifeline. In answer to a question from the hon. Member for Swansea, East (Mr. Anderson), the right hon. and learned Gentleman said:
I am informed that it is funded through the BBC World Service, which is funded by the Government."—[Official Report, 16 January 1996; Vol. 269, c. 558.]
That is just not true.
The current cost of the project is £124,000 a year. Since April 1995, it has been funded entirely externally, with £85,000 provided by six British non-governmental organisations: Save the Children, Christian Aid, HelpAge International, Action Aid, the Catholic Fund for Overseas Development and the British Red Cross. It is appropriate to raise the matter in this debate because £39,000 comes from the ODA. That is a very different picture from the one painted by the Foreign Secretary.
I keenly regret the planned cuts, but I am relieved that their effect is at least partly alleviated by our membership of the European Community. Through a network of multilateral and bilateral agreements with developing nations—many of them are members of the Commonwealth—development assistance and trade advantages are given and administered by the Commission's external services. Non-governmental organisations—many of them British—receive financial support for their vital work, which is now to be at least partly ignored by the Government.
I draw special attention to the work of the European Community humanitarian office, under Commissioner Emma Bonino, whom I had the pleasure to meet recently in London at the ODA. I wish also to mention the fine work of her director, Santiago Gomez Reino; her deputy director, Donato Chiarini; and senior official, Richard Lewar-Towski. The office ensures that urgent, humanitarian aid reaches the most dangerous parts where others may well fear to tread, not only throughout former Yugoslavia but in northern Iraq and its southern marshes, as well as Chechnya and other parts of the Russian Federation that are caught up in a bloody civil war.
Will the Minister think again about his response yesterday to the hon. Member for Salisbury (Mr. Key), who is in his place? The hon. Member for Salisbury described the European Union's aid as being "of inferior quality" and said that it
dilutes our traditional aid effort into parts of the world with which we have…little in common".—[Official Report, 29 January 1996; Vol. 270, c. 638.]
The Minister did not reject that, perhaps, ignorant view out of hand. After all, Iraq is a former colony or protectorate of the United Kingdom. He said that he understood what the hon. Gentleman had said. Will he now support the EU aid package, against his colleague, as he holds ministerial responsibility for it? Who is right—the Minister or the poor who benefit from EU aid? May I say that "little in common" is not a criterion that I have heard before in terms of aid distribution, save one of the lowest sort? It is surely need combined with value for Britain, not shared interests between donor and recipient, that mark out proper development aid. I hope that the Minister will agree with me and not with the comment of yesterday that he appeared to endorse.
This year, 1996, is the United Nations year for the eradication of poverty. I am ashamed that the British Government have started the year in such a desperate fashion. I beg the Government to reconsider the cuts. My right hon. and hon. Friends and I support the motion.

Sir Jim Lester: This is the first time that I have been able to take up the remarks of the hon. Member for Torridge and West Devon (Miss Nicholson) since


she crossed the Floor. It is my experience of the hon. Lady that she has a good heart even if she is misguided in the way in which she seeks to view the future.
There are Conservative Members who do not approve of any reduction in aid. Many of us made that clear before negotiations took place. That may be why we have maintained the bilateral aid programme at the same level despite the other reductions.
Despite the pledge made from the Opposition Front Bench this evening, a Labour Government would face exactly the same pressure. There is the problem of holding public expenditure. That has been tackled for as long as I can remember by means of equal pay for all Departments, with the exception of those responsible for education, law and order and health. That means that no attempt is made to evaluate the value and success of individual Departments and what they achieve in terms of money spent.
The World Service and the British Council have already been mentioned. In public expenditure terms, they have exceptionally small budgets, yet any reduction in what they spend has a greater effect than elsewhere. The left-wing newspaper the Financial Times has an excellent editorial today that explains the position rather better than I have. I have always felt—perhaps because I have always had an interest in international affairs and overseas development—that the Foreign and Commonwealth Office is a Cinderella department. It has a small budget in public expenditure terms, yet it goes through the same process year on year of review and reduction.
Having said that, I believe that the reduction in the ODA's budget this year is enough to sadden people like me, but it is not enough to cause me to despair or revolt, and it was nothing like the scare tactics that were used by some who should know better. We can handle the reduction. It is within manageable terms, and it is in the whole concept of the FER. It is a time of significant change anyway in the delivery of aid and the bilateral aid programme relative to our European multilateral programme, which I support. Intellectually, I have never understood why we cannot conceive of 15 nations working together and being able to do far more in the fundamental provision of essential elements in other countries—I am thinking of my recent visit to Uganda. Fifteen nations working together could provide the infrastructure that President Museveni recognised is needed first and foremost before he is able to start to look at poverty reduction. Bilateral aid programmes cannot do that.
We can look at ways of easing aid to the countries whose overall income is increasing and target aid to the countries that are in poverty, and the poorer countries. I welcome the statement that was made by my right hon. Friend about the increase in the pound-for-pound scheme, because NGOs overall face real problems in terms of the reduction of their direct contributions from the public. They are increasingly valued by Governments, yet they want to maintain a degree of independence and not be seen as arms of Government. The pound-for-pound scheme is an excellent example where that co-operation can be carried forward. My advice to the NGOs with which I am involved is that, if they concentrate on the sheer professionalism that we have, no one could accuse them of being an arm of Government; they would simply be the best vehicle of ideal grassroots aid in whatever country they work.
We also need to watch the prevailing mood in the decline in aid flows at a time of increasing need. It is not acceptable as an excuse that others are doing worse, although one should be conscious of that. I welcome what my right hon. Friend said about the 11th replenishment of the International Development Association, as it is critical. The United States let down the international community and itself because of the way in which it dealt with that replenishment. I was distressed when I was on Capitol hill, speaking in Congress, to find the degree of isolation that currently permeates those two bodies.
The hon. Member for Torridge and West Devon mentioned economic migration. That has been a growing issue over the years which we have discussed in the House in terms of domestic legislation. Some of us are less than happy about it. Unless all the developed countries recognise that the transfer of resources, from whatever source, to the least developed countries takes place and the people are made more comfortable and given hope in their own countries, economic migration will grow and grow.
I welcome the fact that, increasingly, we are beginning to look more objectively at the total needs of the least developed countries. The aid flows, from whatever source, are vital, but just as important is investment from the private sector, which has worked so dramatically in the east, and, of course, the halfway house of the Commonwealth Development Corporation, which is able to bridge the gap between direct investment, where a return is expected immediately, and investments that can take longer to develop the countries that need it most. We are also looking at the reduction in debt. We are looking objectively at the report of the all-party group, which I chair, on the objective analysis of debt, be it bilateral, commercial or multilateral. We must make urgent progress in resolving the outstanding debt over and above the Paris Club negotiations.
I welcome the work that has been done by the working party within the World bank and very much hope that the untimely leap will not prevent progress in moving towards writing off on a case-by-case basis debt that can never be repaid.
A great deal of work has gone into the report. I hope that we shall be able to see the results and that it liberates domestic funds that are currently paid to the bank for investment in areas of the world that face the greatest problems.
The hon. Lady said she was going to Washington soon. I saw the president of the World bank in December. He very much welcomes parliamentary interest in the House in the World bank and its responsibilities. He is prepared to come to the House and address the all-party group or any other forum that we can arrange. I hope to do that in the near future and to talk about the debt situation and about being accountable to parliamentarians, many of whom write regularly to him or his predecessors about the changes in structural adjustment and about using it objectively, not to create further poverty. There are good signs that comprehensive progress is being made, and that is the only way in which the gap can be closed between the developed and the developing world.
One is wary of suggested reductions to multilateral aid unless it is, as the Minister explained, for humanitarian work which is no longer necessary. Many of us are concerned about the United Nations and its future. It has


many problems. One of the principal problems is that the majority of its members are not interested in international affairs. They are members of the club because they feel that they should be. They pay their dues and demands at the last possible moment, and when asked to do anything, many of them, unless it directly affects them, are reluctant to do so. Britain's support for the United Nations is vital as its goes through its reorganisation phase.
Britain, unlike the nations that I have described, has a different history. I am sure that every hon. Member present is proud of that history. We are one of the most international countries in the world, with an outlook, influence and trade that reflect that. The former Foreign Secretary said that Britain punches above its weight in every genuine sense. The amount that we spend on foreign service aid and the various organisations that we support is very small, but the gain is almost impossible to calculate. Many of us are concerned that the constant chipping of relatively small sums from organisations, from his budget and the ODA budget, are contrary to our long-term interest in every sense. I hope that these words are listened to with great care as we approach the next round of negotiations.

Mrs. Ann Clwyd: As always, it is a great pleasure to follow the hon. Member for Broxtowe (Sir J. Lester). He and I see eye to eye on many of these issues. I notice that even he is saddened by the cuts in overseas aid. Those are strong words for him. I wonder just how saddened he must be before he leaves the Conservative Benches and joins his former hon. Friend the Member for Torridge and West Devon (Miss Nicholson) somewhere on the Opposition Benches. I can assure him that there will always be a very warm welcome for him.
As my hon. Friend the Member for Eccles (Miss Lestor) demonstrated eagerly and ably, overseas aid expenditure is to be cut by an amount that would be enough to fund this year's combined programme to Africa—of Action Aid, the Catholic Fund for Overseas Development, Christian Aid, Oxfam, Save the Children and the Worldwide Fund for Nature.
It is a fair bet that one country will not be affected by the Government's cuts. It has been named as one of the world's most corrupt. Its people have suffered at the hands of their Government from some of the worst human rights violations this century. Its Government systematically uses military force to underpin its harsh authoritarian rule. It is not one of the world's poorest countries. Despite all that, however, British aid to it has doubled in the past six years, and is due to increase again this year. The country is, of course, Indonesia.
My concern about Britain's relations with Indonesia arises in part from my visit to the territory of East Timor in 1989 as a member of an Inter-Parliamentary Union group. Indonesia illegally annexed East Timor in July 1976, following a bloody invasion of the territory in the previous year; about 200,000 people were slaughtered as a result of that invasion. Since then, I have closely followed developments in Indonesia and East Timor, and recently conducted research into the bilateral aid programme. The main findings of my report have been submitted to the National Audit Office, which is now carrying out a detailed investigation.
Britain's commitment to Indonesia's ruling regime strikes me as remarkable, but not surprising in view of the Government's amoral and highly selective approach to overseas aid and development. Last year, the Minister for Overseas Development, Lady Chalker, said that
where a Government turns its back on democracy, ignores accountability, flouts human rights and allows corruption to flourish, our aid will only be of a humanitarian nature to help the people in real need.
When she visited Kenya last year, Lady Chalker said:
We have concern about treatment of opposition parties, about the treatment of the press. We have heard very disturbing reports about some legal cases. We know the horrors of ethnic tensions that this country went through. And we know the evils of corruption.
Strangely, however, when Lady Chalker visited Indonesia a few weeks earlier, she was conspicuously silent on the issues of human rights and corruption. Rather than expressing her views, she put her signature to an aid-related loan for £80 million.
It is not as if British aid were helping to alleviate poverty in Indonesia. Only a tiny proportion of it is spent on the vital purposes of poverty reduction and human development; much of the rest is focused on high-cost, prestigious transport, power and communications projects, many of which are of dubious developmental value.
At present, about two thirds of aid to Indonesia is accounted for by aid and trade provision and, Commonwealth Development Corporation expenditure. It is clear that the aid programme is part of an overall strategy that gives priority to the promotion of British business and the sale of British arms. Indeed, as everyone knows, Britain is a major supplier of arms to Indonesia. It is therefore not surprising that aid to that country has increased from £33 million in 1992–93 to £51 million in 1994–95. I should be interested to hear from the Minister whether it will be one of the countries of which he talked that would graduate from aid. Perhaps there will be other considerations.
The Government's attitude to East Timor illustrates the point only too well. Despite persistent statements to the effect that they do not recognise Indonesia's annexation of East Timor, they have provided funds and personnel for projects that include East Timor as well as Indonesia. They have also approved export licences for military equipment that has been used against the defenceless East Timorese people.
Aid money has been used to provide maps and other land data concerning East Timor for Indonesia's Ministry of Transmigration. That is a particularly disturbing example of the misuse of British aid. The Indonesian Government have used transmigration to control the population. Officially, the objective is to. Reduce overpopulation in densely populated parts of the country, and to settle the transmigrants in underpopulated parts such as East Timor. An essential part of the programme, however, is the colonisation of outlying regions with Javanese peasants who are more loyal to President Suharto. The deliberate aim is to undermine non-Javanese societies and cultures.
Britain's assistance has made a real contribution to the integration of East Timor within Indonesia. In practice, the Government have not only recognised Indonesia's annexation but aided it. Furthermore, it appears that the Secretary of State may have acted unlawfully in approving the project under the Overseas Development


and Cooperation Act 1980. It is generally known that Britain has contributed militarily to the subjugation and oppression of East Timor. Everyone knows about the highly controversial £500 million deal for the sale of more Hawk aircraft to Indonesia. Foreign Office officials have dismissed eyewitness accounts of the sighting of the aircraft in East Timor; assurances given by President Suharto that the aircraft would not be used against the Timorese have proved worthless.
Only a few months ago, the British journalist Hugh O'Shaughnessy saw two Hawks make a low pass over Dili, the capital of East Timor, as part of the security forces' campaign of intimidation and terror to warn the people against staging any public protest to mark the fourth anniversary of the Santa Cruz massacre that had resulted in the deaths of 150 unarmed civilians. Noam Chomsky once described the west's proclaimed commitment to human rights as
one of the great lies of modern history",
and the Government have provided ample evidence to support that assertion. As we know, they would be much happier if persecuted and abused people were prevented from coming to Britain in the first place, and in that regard the East Timorese are proving a bit of a problem.
In September, five young Timorese men applied for asylum after taking refuge in the British embassy in Jakarta. Their application stated that
military brutality has become a fact of everyday life in East Timor—a military brutality which has consisted of sudden arrest, rape, intimidation, terror and slaughter".
In the event, Portugal granted the five asylum while Britain dragged its feet.
The military brutality referred to by those asylum seekers includes the activities of the Indonesian national police. The INP is part of the Indonesian armed forces; it is essentially a paramilitary force, which, in areas such as East Timor, is wholly under the command of the local military. The primary role of the armed forces, including the INP, is to maintain internal security. That has led to serious human rights abuses by the police throughout Indonesia, yet our Government have been providing training awards for INP officers since 1979 as part of our aid programme. A consultancy unit established under the training project is available to advise and assist the East Timorese police authorities if required, and the Government have admitted that officers trained under the aid programme may subsequently serve in East Timor.
In March 1990, the Government approved the police management training project, involving expenditure of £713,000. The project claims to have as its objective the improvement of the quality of service of the INP, through the establishment of a consultancy unit which advises senior management on strategic change. The Government have stated that they hope that the assistance that they have provided
will influence all receiving it and help develop respect for human rights in East Timor.
In view of that statement, the support for the INP must be a completely ineffective and inefficient use of aid money.
The Overseas Development Administration's "Guide to Aid Procedures" specifically states:
ODA considers non-military security organisations such as police forces…as legitimate beneficiaries of the aid programme…However, each request for such aid must be considered most carefully in terms of both general human rights and the rights of the

individual, taking account of the circumstances of the country in question. For instance tasks assigned to police vary widely from country to country and could be of a para military nature".
Again in the words of the ODA, in doubtful cases, a request for aid must be referred
to higher authority or for Ministerial approval.
I have strong doubts about whether correct procedures were followed before police funding was approved. If it was approved, it would be interesting to know which Minister approved it.
The Government's argument is that, in introducing officers to western approaches to policing, they are aiming to improve respect for human rights. That assertion is plainly ridiculous. Why is it that these officers receive no training in human rights issues? Why is it that the British consultants working under the project have had no formal training in human rights issues and do not even provide advice on such issues?
In the United States of America, in evidence to the Senate Foreign Relations Committee about similar training for Indonesia, the executive director of Asia Watch said:
These police are part of the armed forces, who are responsible for torture on a routine basis. Their role in practice is to get information from suspects by any means possible and to administer summary punishment as they see fit".
He added that
to give them additional training with US funds as long as the structure in which they operate remains unchanged would be utterly irresponsible.
The degree of our Government's responsibility in training the INP within the aid programme can be judged by the records of certain officers who have benefited under British-funded training. For example, Colonel Hindarto was trained in Britain, subsequently became Jakarta's chief of police, and was clearly influenced by his British training in carrying out his duties. The Jakarta Post reported last year:
Even…Hindarto admitted…that officers had a strong tendency now to shoot people caught red handed at a crime 'in order to give the public a greater feeling of personal safety'".
The article adds that
Hindarto said he fully supported his subordinates in the shooting cases and that police sometimes are forced to resort to shooting criminals in self-defence. Since January 1995…police officers have reportedly shot 25 criminals, 19 of which died.
In a sworn statement made last year in Lisbon, an exile described the treatment meted out by Hindarto, when he was chief of police of a region that included East Timor, to one victim who was accused of involvement in a demonstration that preceded the Santa Cruz cemetery massacre. The man was hit in the face with gun stocks, kicked and severely punched. He was kept naked for the first five days of his detention, tortured and burned on his face and body with cigarette butts. During the 40 days of his detention, he was repeatedly beaten and hit with bars of iron and gun stocks. In his statement, the exile states:
His head was the target, consequently he is mad now".
The statement includes examples of other atrocities, all carried out when Hindarto—a man trained under the British aid programme—was the chief of police.
It is difficult to identify the reasons for the Government's support for the INP. However, as the Indonesian armed forces perform a dual security function, perhaps the Government are looking to foster their


influence over senior officers such as Hindarto who are potential buyers of British arms. In any event, there is, once again, no consideration for human rights and poverty reduction.
A few years ago, I initiated the investigation into the Pergau dam by reporting my concern to the National Audit Office. Unfortunately, I do not think that the Government have learnt one lesson from that case as they persist in funding projects which are, at best, developmentally unsound and, at worst, positively harmful. Sadly, it seems inevitable that support for such projects will continue so long as the Government remain ideologically opposed to considering the needs of the poor ahead of the needs of British arms manufacturers and business elites.
The Government spend much time and effort proclaiming that human rights and good governance are important criteria that govern their foreign aid policy—no doubt the Minister will confirm that yet again tonight—but it is clear that, in the case of Indonesia, that litmus test is not being applied and that a huge amount of public money is being spent on projects that are of no obvious benefit to Indonesia's poor and are devoid of developmental merit.
Projects that positively support the repressive Ministry of Information and the brutal national police and which aid Indonesia's illegal annexation of East Timor are a shocking indictment of the Government's handling of the bilateral aid programme—an indictment that the Government have a duty to answer.

Mr. David Faber: As so often on these occasions, we are a little short of time, but I should like to begin on a personal note and pay a warm tribute to my right hon. and noble Friend Baroness Chalker who, until a couple of weeks ago, I was honoured to serve as parliamentary private secretary. Just before Christmas, I and many others from the Foreign Office and the world of aid—and, indeed, representatives of foreign Governments—attended a reception at the Foreign Office to mark her 10th year as a Minister at the Foreign Office, the vast majority of which time has been spent as Minister for Overseas Development.
My right hon. and noble Friend has, throughout, been a tireless campaigner on behalf of developing nations when negotiating with the Treasury at home and in ensuring the effective delivery of aid to those who need it. It is largely because of her personal efforts and expertise that Britain is now seen as a good friend to countries in Africa, the Commonwealth and, indeed, throughout the developing world, which recognise the value and efficiency of British aid above that of almost all other countries. There can be few other Ministers who command the respect that she does among those who deliver the aid and, more important, among those who receive it.
As we have heard, the United Kingdom is the fifth largest aid donor in the world, and the programme for 1996–97 will be worth £2.154 million. In 1994, about 55 per cent. of our aid programme went on bilateral aid, 55 per cent. of that went to Commonwealth countries and two thirds went to the poorest countries. Last year's Budget settlement will mean that the planned allocation

for bilateral aid for 1996–97 will be little changed from the forecast set out in last year's Overseas Development Administration's departmental report, but the Department's new plans take into account lower forecasts for multilateral aid such as that channelled through the World bank and the European Union.
The Opposition motion deals again with the well argued issue of the United Nations target of 0.7 per cent. of gross national product being spent on overseas aid. The Government have consistently reaffirmed that we will work towards that target, but have said, quite rightly, that we cannot set a timetable as any decision on achieving that target must always depend on an overall review of public expenditure, year on year.
In fact, as the House knows, we currently spend some 0.31 per cent. of GDP on overseas aid, which is higher than the average 0.29 per cent. of all the countries represented on the development assistance committee.
It is interesting to note that, once again, the Opposition refuse to set a timetable for achieving the UN target, presumably because it represents a too easily costed spending promise, although we heard from the hon. Member for Eccles (Miss Lestor) that the trend will, Labour hopes, be reversed in the first year of a Labour Government. Rather, the motion speaks of "steady and measurable progress", a phrase that is, I think, vague and woolly enough to be supported by almost every hon. Member. Of course, Labour's 1992 general election' manifesto contained a pledge—repeated at the 1993 conference—to achieve the 0.7 per cent. target within five years. That pledge would appear to have been dropped.
Nor can I let go the speech made by the hon. Member for Torridge and West Devon (Miss Nicholson) for the Liberal Democrats. Unfortunately, she is no longer in her place, but I am sure that the hon. and learned Member for Fife, North-East (Mr. Campbell) will report to her what I say. I fear that the hon. Lady may have misunderstood my intervention. I was not in any way doubting her ability to speak on overseas aid. She has a long and good record of doing so in the House. I was doubting the remarkable change of mind that she appears to have had since June last year. I should like to quote further from the speech that she made at that time. She spoke of
The primacy of the market for freedom and wealth creation
and of the Government's objective being quite superbly achieved during the past 15 years. She continued:
I was very surprised that Opposition Members, with their constant bleating about old-style socialist policies—moan, moan, moan—failed to acknowledge that great British success story."—[Official Report, 19 June 1995; Vol. 262, c. 108–9.]
I have no doubt that she is well able to speak for the Liberal Democrats on overseas aid, but I doubt the fact that, as recently as June, she was singing a very different tune.

Mr. Menzies Campbell: How long did it take the hon. Gentleman to decide that the poll tax should be repealed?

Mr. Faber: I was not in the House either when the poll tax was initiated or when it was repealed.
I, like many other Conservative Members and Conservative councillors, have had a pleasant couple of weeks reading the fascinating document "Towards 1996", which the Liberal Democrats Whips Office has produced.
I tried hard, while reading it this afternoon, to find a reference to overseas aid. The only reference to the Liberal Democrats' policy on overseas aid that I can find in the entire document is about the fact that the right hon. Member for Yeovil (Mr. Ashdown) cares more about Bosnia than he does about anything else.
The central aim of the British aid programme is poverty reduction. Our strategy is based on seeking to inspire broad-based economic growth, on investing in people, and on providing social safety nets where they are needed. Short-term relief for emergency aid is only part of that strategy, although it is overwhelmingly the most publicised.
Across the globe, 300 million people are affected by disasters—and the number is growing by a staggering 10 million a year. An increasing number are victims of violent conflicts. Last year, there were 56—mostly internal—wars, compared with 46 in 1990. Civilians all too often bear the brunt of such tragedies. I learnt the staggering statistics today. At the beginning of this century, 90 per cent. of all war casualties were military; now, 95 per cent. of all war casualties are civilian. Conflicts also lead to huge movements of populations. The number of refugees increased from 13 million in 1989 to 23 million last year.
Those of us who have seen at first hand the pain and suffering in the former Yugoslavia can only despair at those figures, but we can also take pride in our country's response. The ODA responds every year to between 50 and 100 emergencies, allocating more than 300 grants. In the previous financial year, those grants totalled £334 million and went to 71 countries.
Perhaps this is a suitable moment, since I am not sure that I have heard it said this evening, to pay tribute to all those who are paid or volunteer and who work so hard, often in appalling conditions, to deliver our aid overseas. We should especially remember the families of the three British soldiers who were killed in Bosnia at the weekend while going about their duty of implementing our foreign policy.
Emergency aid is only a small part of the overall programme. Contrary to the wording of the motion, there have been some marked falls in relative poverty around the world over the past 30 years. Life expectancy in the poorest countries has increased by more than 12 years. Infant mortality rates, such as in India where they have halved, have fallen steeply. There are still huge variations however, as some countries progress and others do not. That is why we target aid to the places where it is most needed.
In June 1994, the Organisation for Economic Co-operation and Development praised the quality and effectiveness of our aid. Two thirds of our development aid goes to the poorest countries in the world. British aid works at all levels. In the local community, we target poverty reduction projects, often in support of a local non-governmental organisation. We often work with Governments to help improve standards in, for example, health or education provision. We use aid, too, to help speed up a broader policy of institutional reforms in promoting, for example, good government and sensible public expenditure. We have written off more than £1.2 billion-worth of debt, and led the way in implementing the Trinidad terms.
Most crucially, we recognise the vital importance to developing countries of free trade. Trade brings in three times as much foreign exchange to developing countries as does aid. The United Kingdom provides half of all the European Union's private investment, and it is the third largest investor in the world, after the United States of America and Japan.
Our aid programme is wide and effective. The Opposition motion says that our multilateral aid is suffering because of our bilateral contribution. In the current year, our multilateral contributions have exceeded our bilateral aid for the first time. Although an appropriate balance should be struck, it is clearly important that the money should be well spent, so I hope that, when my right hon. Friend the Minister winds up, he will say a little about the checks and balances that we can exercise in Brussels to ensure that that is so.
We all want multilateral spending to be as effectively delivered as is our own bilateral spending, and we want the United Kingdom to get proper credit for the contributions that it makes through the European Union, for example, which is not always the case now.
I am sorry to refer again to the hon. Member for Torridge and West Devon, but in conclusion I can do no better than quote what she said at the end of her speech on 19 June:
this evening I urge hon. Members to discard the rag-bag of items proposed by Opposition spokesmen and to give the Government's amendment their whole-hearted support".—[Official Report, 19 June 1995; Vol. 262, c. 110.]

Ms Diane Abbott: My hon. Friend the Member for Eccles (Miss Lestor) made a powerful case from the Dispatch Box. She made the moral case for aid, but I am afraid that I do not share her optimism about the moral sensitivities of Tory Ministers, so I intend to make the practical self-interested case for aid.
I begin by emphasising that it is important to put all the issues connected with aid and development in the wider economic context. That is why I welcome the fact that the Government motion refers to their work on debt.
The first point to be made about aid is that it is quite wrong to present it, as many Conservative Members do, as though it were merely a question of charity and of handouts to undeserving black and brown people. The fact about the flows of money between Britain, the European Union, America and the third world is that more money flows from Africa, India and the rest of the third world in debt repayments than flows to them in aid.
If we put aid, especially the vexed question of debt repayment, in the wider economic context, we can see it more clearly. As there is a brief mention of debt in the Government's motion, we must not forget how the debt was incurred.
The history of the debt crisis of the 1970s and 1980s is a fantastic tale of the agents of international banks criss-crossing the third world urging dictators to take on debts. Much of the money never touched the borders of the countries that ostensibly borrowed it. Instead, it was safely stashed away in Swiss banks. Much of it was spent on arms, and most of it never trickled down to the people of the countries concerned, in whose name the debts were incurred.
There is something very cruel and unfair in the fact that, as we approach the millennium, the people of some of the poorest countries in the world are toiling to pay the interest on the interest of debts incurred in their name by long-past military dictators.
The Government speak of their record on debt, and Opposition Members commend them for their efforts in relation to the Trinidad terms and in trying to change the way in which the World bank looks on debt, but, sadly, past efforts at debt reduction have focused on two categories of country—countries such as Mexico and the Philippines, where it was politically convenient for the United States to forgive debt, or the very poorest countries.
There are, however, many so-called middle-income countries, such as many of the nations of the Caribbean, with social conditions that would require the Government to consider debt reduction for them much more seriously than they have hitherto. The Trinidad terms were worthwhile, as they did not involve huge sums of money, but they only began to chip at the weight of debt—even for the poorest countries—and they did not help the deserving populations in many so-called middle-income debtors.
If the issue of aid is to be viewed properly, it must be considered in the context of this country's work on debt reduction and its role in the International Monetary Fund and the World bank. A review of the terms of some of the structural adjustment programmes that we are forcing on third-world countries is long overdue, as the record of such programmes is not wholly good. In many countries that have had structural adjustment forced on them by the IMF and World bank, living standards, education and basic health care available to ordinary people worsened in the 1980s.
Sadly, in recent years we have witnessed the redirection of flows in aid and other multilateral assistance from the poorest countries in Africa to eastern Europe. Opposition Members want, of course, help to go to eastern Europe, but not at the expense of the very poorest peoples of the world. At this point, I wish to echo what was said by the lion. Member for Carshalton and Wallington (Mr. Forman) about the Commonwealth preference. Many people were sad to hear that there is a possibility that the ODA will cut aid to any part of the world, but in particular to the Caribbean.
I travel regularly to the Caribbean, particularly to Jamaica, where my family comes from. It is sad that although people in Jamaica and the Caribbean hold the Commonwealth link in the highest esteem, Ministers speak of it in the Chamber in a cavalier way. Countries all over the world have Chambers that are replicas of this one, and one can step out of the tropical sunlight into such a replica. Those countries hold the British and Commonwealth link in the highest regard, yet daily people see Ministers turn away from the Commonwealth. I think that there is a case for a Commonwealth preference in relation to aid.
I feel most strongly about the Caribbean. It is all very well for Ministers to look at the totality of GDP figures in the Caribbean, but the figures mask the increasing poverty and decline in basic social services in health and education. The sugar and banana industries in the Caribbean have collapsed following the impact of Lomé,

and the ill-effects of the north American free trade agreement have meant that trade that might have gone from America to the Caribbean is now going to the NAFTA counties.
What do the Government think the consequence will be of their cuts in aid to the Caribbean? I can tell them that it will not he an increase in self-reliance. Rural labour will not be getting on their bikes. The consequence will be an increase in the drugs trade. Where traditional agriculture has collapsed in the Caribbean, it has been replaced by the illegal drugs trade. There is no point in Ministers talking about a war on drugs while the Foreign Office and the ODA pursue policies designed to create the economic conditions in which the drug trade flourishes.
There are historic links between this country and the Caribbean. Many people from the Caribbean fought for this country in the war or helped the war effort, and there is a large Caribbean community here. There is an ever-growing drugs menace in the Caribbean, and the Government should think seriously before cutting the already low level of aid to the Caribbean.
I have spent today in the Committee considering the Asylum and Immigration Bill, and I do not wish to bring the details of that Bill into tonight's debate, but in the context of immigration and asylum we hear over and over again about the waves of economic refugees and how the continents of the world are being criss-crossed by refugees driven by the Four Horsemen of the Apocalypse—war, famine, poverty and pestilence. What is the point of introducing increasingly punitive and criminalising measures against economic refugees if our aid programme does not address the causes of economic refugees? I am not saying that it is practical at this point for Britain to open its doors to economic refugees, but it is heartless and impractical not to aim aid and development work at dealing with the causes of economic refugees. Our aid should be directed at some of those countries to help development and growth.
Conservative Members have the idea that a practical approach to aid means misusing aid as a form of soft loan for arms deals and dubious construction projects. That is wholly impractical. Aid should be used to promote growth and development, which is the only effective check on the waves of economic refugees. Surely nobody seriously believes that people leave Africa, the Indian sub-continent and other parts of the third world to sit in damp council flats in Hackney and live on benefits. They leave because they are driven to do so by poverty.
Our aid programme should not be directed to help arms dealers: it should be directed to the relief of poverty. The aid programme should not be abused in other ways. It is bizarre that Dominica is getting extra aid—alone in the Caribbean—because it is willing to take a refugee who is inconvenient to the British Government. That is another abuse of the aid programme.
Although the Prime Minister claimed in the Queen's Speech that the commitment to overseas aid would be maintained, ever since the Conservatives came to power investment in aid has gone down and down. There is not just a moral case for aid but a present-day, economic, internationally self-interested case for aid to cement the strong relationships with Commonwealth countries, such as those in the Caribbean. We should continue to deliver an aid programme that is in the interests not of construction companies or arms dealers but of the poorest people in the world who need relief from poverty.

Mr. Robert Key: I congratulate my right hon. Friend the Minister of State, Foreign and Commonwealth Office on his speech. He said much that I would have wished to say, so I need not repeat it. I strongly support the Government motion. I shall speak briefly about three aspects of aid—poverty and suffering, multilateral aid and increasing the poverty focus.
On the question of poverty and suffering, I wish to draw attention to the worldwide premature abandonment of the high profile accorded to the problem of acquired immune deficiency syndrome over the past few years. That work has not been mentioned in the debate so far, but it is crucial. Human immune deficiency virus rates are stabilising in some parts of the world, but the epidemic is continuing to spread at an alarming rate.
Many countries with weak health and social systems are finding it virtually impossible to cope with the growing numbers of people falling ill. In certain African cities, the rate of HIV infection is as high as one in three adults. In rural Zambia, mortality among hospital nurses had soared from 2 per cent. in 1980 to almost 27 per cent. by 1991.
There have been many successful interventions by the world community, and Britain—I am proud to say—has been in the forefront. Where funds have been invested in community activities in the past three years—for example, in parts of Tanzania and Thailand—there have been impressive successes in slowing the rate of growth of the HIV epidemic.
There have also been large-scale changes in sexual behaviour, which 10 years ago people said was quite impossible. There has been a clear-cut decline in conventional sexually transmitted diseases from north-west Europe to Thailand and from Costa Rica to Zimbabwe.
There are still many concerns. I hope that the future focus of the Overseas Development Administration budget will not affect programmes aimed at preventing the spread of HIV at a time when the epidemic is continuing to spread at an alarming rate. It is important to remember that, while 93 per cent. of the people with AIDS live in developing countries, only 8 per cent. of HIV and AIDS funding is allocated to those regions. It is also important to remember that the World Health Organisation has estimated that up to $3 billion is needed every year for basic prevention of HIV and other sexually transmitted diseases in developing countries, yet only 10 per cent. of those funds is currently available.
British international trade is of prime importance when considering the aid programme, and private flows simply cannot be ignored. They complement Government donations—taxpayers' donations—and the contributions of non—governmental organisations.
I sometimes wonder what my constituents in Salisbury would make of the debate, which has been esoteric to say the least, when what they understand to be meant by overseas aid is the sort of charities for which they work so hard—for example, Oxfam, which has such a strong base in our communities.
What on earth do our young people think when they hear us rabbiting on as we have been tonight? Their idealism is unmatched anywhere in the world, as far as I can tell. It is undiminished in the younger generation,

compared with how we felt 20, 25 or 30 years ago. What do they think when we are not talking about how they can get involved?
We have to face some difficult problems. Humanitarian emergency aid is one. I know of no one, whatever his or her political leaning, who wants to cut that—it is accepted by everyone. However, most people understand the aid programme to be poverty focused aid—water and food, usually in Africa and perhaps in India and Pakistan. What about India and Pakistan? Are we really talking about the British taxpayer supporting the poorest people in those countries, when, at the other end of the economic scale, they have the capacity to develop nuclear industries?
I was interested to receive press releases from the Overseas Development Administration in October and December. Of Shanghai, I read:
Rapid development is taking place.
The ODA also says that
Shanghai is China's biggest municipality and industrial centre, supporting heavy and light industry as well as township and village enterprises.
So why is our aid programme providing £2.8 million
to help combat industrial pollution and improve the municipal water supply"?
Similarly, I do not think that my constituents understand why the overseas aid programme is spending £8.4 million on the new international airport that is being built south of Nanjing. It is not as if the Chinese do not have an airport in that province—they have, but they do not think that it is big enough.
Of course, the Government must promote British interests and support British companies overseas, but those are important issues and they raise questions about the aid framework and particularly about aid and trade provision. I suggest to my right hon. Friend the Minister of State that the time has come for more scrutiny of the provisions—for example, the concessional financing arrangements—which would benefit our aid programme. I am not arguing that such arrangements should not be made, but they are misunderstood and a stronger case can be made for them.
On 13 February, a further concessional financing arrangement will be signed between the United Kingdom and China, which will double that arrangement. That is the sort of thing that we should tackle.
Finally, on multilateral aid, it was a pleasure to be criticised by the hon. Member for Torridge and West Devon (Miss Nicholson) for being ignorant—I then realised that I must be on the right track. Her comments were somewhat premature, however. It is true that I do not boast about my knowledge as shamelessly or as often as she does, but I yield to no one in my support of UK overseas aid, not just as parliamentary private secretary to Chris Patten, but for many years before that as a supporter of the Project Trust and of GAP activity projects, which introduced hundreds of young people to the developing world. In multilateral aid we have a new weapon that we can use to our advantage and to that of others.
I must say a few words on the importance of the southern flank of the North Atlantic Treaty Organisation and how that is relevant to overseas aid—[Interruption.] It will take only a couple of minutes. I am sorry if the


hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) is angry with me, but there have been some lengthy speeches by Opposition Members.
There is no doubt that poverty on the southern side of the Mediterranean is of direct significance to what is happening on the northern side. There is instability. We see the state military threat from north Africa as being small and the terrorist threat as being real, but we must concentrate on tackling instability in north African countries, using intelligence and technology. It is not simply a matter of addressing Islamic fundamentalism, which becomes a threat only if it harnesses and nourishes people's discontent.
Poverty, and the contrast with what is happening on the other side of the Mediterranean, is becoming increasingly visible through tourism and television. The answer, as with so many other examples of the use of multilateral aid, is to reduce the motive for economic migration. That is where the European Union's aid budget can be of immense assistance and can benefit both them and us. It is a question of trade and investment. Why export jobs from this country and from Europe to the Pacific rim when we can help to create those jobs in countries so much closer to home? That is a good purpose for a multilateral aid budget and I support it. I hope that my right hon. Friend the Minister will be able to persuade the Treasury to continue to keep our aid budget at the highest level that we can afford and justify to our constituents.

Mr. Tam Dalyell: Thanks to the Inter-Parliamentary Union, the right hon. Member for Tonbridge and Mailing (Sir J. Stanley), accompanied by my hon. Friends the Members for Mansfield (Mr. Meale) and for Midlothian (Mr. Clarke) and by the hon. Members for Mid-Kent (Mr. Rowe) and for Vale of Glamorgan (Mr. Sweeney) and I were able to go to Nepal. May we have some formal statement on the future of the valuable agricultural research station at Lumle, about which the right hon. Member for Tonbridge and Mailing and I met Lady Chalker? Its value is that it does urgent practical research into local crops in one of the poorest countries in the world. The scientists who took us round said, movingly, that they were really helping their people.
We have an obligation to a small group of people, the people of the Pitcairn islands, to establish whether it is true, as suggested in the serious Japanese press and confirmed this evening by some Japanese, led by the ambassador, who were in the House, that there has been serious leakage from Mururoa. We are obliged at least to establish whether the people on Pitcairn, who clearly cannot do anything for themselves, are in danger.

Mr. George Foulkes: I am not sure what debate the hon. Member for Salisbury (Mr. Key) has been sitting through or, indeed, whether he has sat through the debate. Far from being esoteric, it has been valuable and lively. As the hon. Member for Torridge and West Devon (Miss Nicholson) said, it was opened with great sincerity by my hon. Friend the Member for Eccles (Miss Lestor). She was followed by the Minister, who spoke with some

urbanity, with his carefully crafted soundbite about "the substantial aid programme of which we can be proud". We have had that on a number of occasions and no doubt we shall hear it again. Although the journalists and spin doctors tell me that this is the age of the soundbite, I do not think that soundbites can hide the truth.
The Minister attempted, with, as I said, some urbanity to justify something that I do not think that he really believes in. The hon. Member for Broxtowe (Sir J. Lester) made it clear that some Conservative Members do not believe what was said by the Minister. Some of them must oppose, as we do, the hypocrisy peddled by a Government who are seeking to hold on to the trappings of power. They say one thing and they do another. They say that there is a substantial aid programme of which they can be proud, but they preside over cut after cut. The Deputy Prime Minister cannot take that—he cannot stand people picking up the sort of soundbites that he uses and throwing them back at him.
Successive Governments' commitment to the developing world may not be seen by some as a crucial campaigning issue. Some people may think that the issue does not win elections, but that they are won on issues such as health, education and law and order. But are we politicians who care deeply about development as far removed from the public on this issue as some people would have us believe? My hon. Friend the Member for Eccles quoted a Harris poll in which 81 per cent. of those questioned agreed that it was important that the British Government—not just voluntary organisations or private sources—provide aid to the developing world, and 79 per cent. thought that Britain should increase the amount currently given. When will Ministers realise that the cuts that they regularly and meekly concede when the Chief Secretary to the Treasury calls them into his office are not supported by three quarters of the population?
The pride that the Minister keeps mentioning is nothing but rhetoric. The Government constantly say one thing and do another. The most recent Budget was a prime example. The ODA issued a public statement. Press releases quoted earlier said that the aid programme was to be increased. That was not true. The independent House of Commons Library analysed the figures, which show that, in both cash and real terms, the aid budget will fall this year. The Government say one thing but do another time and again.
As my hon. Friend the Member for Eccles said, even the Department's fundamental expenditure review estimates that Britain's aid as a percentage of gross national product will fall to 0.26 per cent. by 1997. When Labour left office in 1979, it was 0.52 per cent. and rising; now it is 0.3 per cent. and falling. Instead of vacillating and undermining multilateral assistance, Ministers would do better to spend their time opposing the cuts and the loss of British influence throughout the world caused by reductions in the World Service and in funding to the British Council. Above all, they should look at the fundamental expenditure review and oppose the cuts and the removal of British influence in the Caribbean, Latin America, south-east Asia and the Pacific. Guyana, Haiti and Vietnam have low per capita incomes and need assistance.
We heard the Minister's weasel words about the Caribbean. I hope that he will say something more positive about the Caribbean when he replies to the


debate. He shrugged off the importance of the Commonwealth. I hope that, when he replies, he will answer the points made about it.
The Minister should not kowtow to the Chief Secretary to the Treasury. I hope that he will give a pledge tonight that, because of what Opposition Members and some Conservative Members have said in the debate, he will press the Chief Secretary for a substantial and effective aid programme so that his deeds can match his words. It would be an easier task if the Minister were directly involved in the decision making instead of getting the crumbs handed down from the Cabinet table.
When Labour takes power, the ODA will be transformed into a Department of international development, with its Secretary of State in the Cabinet, speaking up for the overseas aid budget. A Cabinet Committee will bring together Ministers from the Department of Trade and Industry, the Ministry of Agriculture, Fisheries and Food, the Department for Education and Employment and other Departments, to utilise their expertise in the developing world. A Select Committee will monitor our work, and a new vision and fresh impetus will be given to the Cinderella Department that exists under the present Government.
I do not deny that some aspects of the fundamental expenditure review, which will be debated in more detail once the House has received a report on it, are to be welcomed. Incidentally, some hon. Members may have seen tonight's programme on Carlton television about Humana. It was an excellent investigation into that organisation, but I hope that people will not judge the other excellent non-governmental organisations involved in overseas aid by one bad organisation. We want consultation with NGOs and an increased ODA role in multilateral institutions. There are things to be supported in the FER, but all of them are used as a smokescreen to camouflage the cuts that are the essential element of the document.
The withdrawal of aid from some of the poorest countries in the Caribbean and Latin America and the abandonment of some Commonwealth partners and of the dependent territories—colonies that have no place to look to other than the United Kingdom, as my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) said—are an appalling indictment of the Government.
The budget has been decimated by the present Government. Before any Tory placemen rise to their feet proving Pavlov to be correct, let me reaffirm what my hon. Friend the Member for Eccles said earlier. She said:
In their first year of office, a Labour Government will start to reverse
the decline in overseas aid expenditure. It does not come much clearer than that. Even the hon. Member for Westbury (Mr. Faber), if he were listening, should be able to understand that.
Justification for the Government's continuing reduction in the aid programme was given by the Minister on Monday and again today. We heard about reductions in other countries' expenditure—the United States and Italy are repeatedly mentioned—but countries such as Japan are substantially increasing their programme. Taiwan is becoming a major aid donor. Let us forget the irrelevant comparisons. We should be standing proud in relation to our role in the world.
The Minister's plea, in mitigation, that a tight spending round hurt everyone this year is pretty pathetic—he said that hard choices had to be made—considering the need in the third world. One person in four lives in absolute poverty; basic social services are denied to more than 1 billion people; 130 million primary school age children are not at school. Every day, 35,000 children die of preventable diseases—diseases that might be prevented with more help from countries such as Britain. The magnitude of the need is frightening, and is ignored by Conservative Ministers.
The Government, as my hon. Friend the Member for Hackney, North and Stoke Newington said, have even failed by their own standard, by their own claim, by their own natural instincts to look after themselves, to consider the political and commercial advantages to Britain in increasing the aid programme. The size and expertise of the aid programme have helped Britain to maintain an influence in the United Nations, in the G7 and in the World bank that is not justified simply by the size of our global responsibilities. We need to continue to have a global aid programme, to justify our participation in those institutions.
Looking beyond the short-termism of the present Government, aid to the developing world can save the Chancellor money. A better environment is created for trade and investment by increasing prosperity and stability in the developing world. Aid generates income for many British organisations. Do not Ministers read the advice of their experts, as expressed in the FER?
I want to give the Minister time to reply, so I shall leave out some of the things that I intended to say. No doubt I shall have opportunities to return to them. I shall say, finally, what we shall do after the next election.
Labour will set out its agenda in full during the summer. We shall produce an agenda for the future—a set of policies that will revitalise an area regarding which we have in Britain the ability, the expertise and the resources to help the developing world. The agenda will be rooted in traditional Labour ideals—fairness, rights, responsibilities and the idea of society and community, which is as relevant abroad as it is in the United Kingdom.
We recognise the enormity of that task. In the past 16 years, Conservative Governments have decimated our aid programme. Labour recognises the importance of our aid programme to the populations of the developing world, to us at home and to Britain on the world stage. Conservative Governments have failed in their moral duty to the developing world and in their obligations to Britain.
The next Labour Government will bring with them the moral values and the political agenda to tackle poverty in the developing world and to place Britain, once again, at the heart of the international community.

Mr. Hanley: With the leave of the House. I am grateful for the courtesy that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) has shown in allowing me time to respond to some of the points that were raised during the debate.
I believe that it has been a very good and useful debate, and I am pleased to see the high level of interest that hon. Members on both sides of the House have shown about the aid programme. The subject is certainly worthy of


debate and there is considerable public support for that programme. That is why the Government devote a high level of public spending to the official aid programme, which is several times greater than the total contribution of all the non-governmental organisations. Hon. Members' remarks during the debate confirmed their support and high regard for the official aid programme.
As my hon. Friend the Member for Westbury (Mr. Faber) said in his excellent contribution, the Opposition seem to have shed their original commitment to raise the aid programme budget to 0.7 per cent. of gross national product in the space of a Parliament—unless the hon. Member for Carrick, Cumnock and Doon Valley will reaffirm that commitment now.

Mr. Foulkes: indicated dissent.

Mr. Hanley: The hon. Gentleman says one thing and does another. Even after the debate, I am unclear as to the Opposition's position with regard to the size of the aid programme. The hon. Gentleman opposed almost every reduction in that programme, for whatever purpose, but he has offered no real commitments: we hear only high and pious words.
I am pleased that the debate has provided an opportunity to explain the results of the Overseas Development Administration's fundamental expenditure review. It is exactly what we are trying to encourage and I am surprised that some Labour Members found it difficult to understand. I believe that there is support on both sides of the House for what the FER advocates. We all want a strong aid programme; we all want a programme that focuses on the poorest countries, which are not yet able to help themselves. We all want aid to go where it is most needed and where it can do the most good. Would the Opposition reduce our commitment to the poorest countries? Would they give aid to countries where it is not needed?
In answer to the question posed by the hon. Member for Eccles (Miss Lestor): yes, we plan to maintain funding of the United Nations Development Programme and UNICEF in 1996 at broadly the same levels as in 1995. The hon. Member for Linlithgow (Mr. Dalyell) referred to the Lumle research station in Nepal. Her Majesty's Government have supported that research station for nearly 30 years and we are now examining the best way of supporting research into hill agriculture in Nepal in order to maximise the value of the research carried out at Lumle and elsewhere in the hill areas of Nepal.
The hon. Gentleman referred also to our responsibilities for Pitcairn island. I assure the hon. Gentleman that, as the most easterly country for which I have some responsibility, I care about Pitcairn and its population of 53. After all, I had a majority of 74 in this place and it is fairly special when one's parliamentary majority is bigger than a country's population. I shall certainly look at the matter that he raised, although initial signs are that the people of Pitcairn are not in danger.
The hon. Member for Aberdeen, North (Mr. Hughes) referred to my comment about our national aid flows and our private sector flows. He said that I cited bogus figures. It is sad that the hon. Gentleman claims that our figures are bogus as soon as we achieve a United Nations target.

The UN definition is 1 per cent. and we have exceeded that in total national aid flows and private sector flows. I think that we should be proud of that achievement; it should not be rubbished.
The hon. Gentleman referred also to the progress on the South Africa-European Union agreement and said that it had been slower than he had hoped. I agree—progress has been slower than everyone hoped. We have pressed EU member states about an early resolution of the matter, which was discussed at the Foreign Affairs Council only yesterday. We are hopeful that a timetable can be agreed, with a conclusion reached within the Italian presidency.
The hon. Gentleman referred also to Angola. I can assure him that Britain is working closely with our partners, including the United States, to sustain the peace process in Angola. We provided almost £9 million in emergency aid to Angola last year and we have developed a strategy for supporting the transition to rehabilitation, reconstruction and development. I assure the House that we plan to continue our substantial support to Angola.
The hon. Member for Torridge and West Devon (Miss Nicholson) said that under the FER, the ODA seems to have dropped its commitment to women. I am happy to reassure the hon. Lady that the redefinition of the ODA's aims in no way reduces the priority that we attach to helping women.
My hon. Friend the Member for Broxtowe (Sir J. Lester) made his usual excellent speech. Hon. Members on both sides of the House will agree that he is always worth listening to on this subject. I shall draw his speech to the attention of my right hon. and noble Friend the Minister for Overseas Development on her return from Africa—a country that he knows very well.
I am grateful, too, for the compliments about my right hon. and noble Friend. She does a superb job, and has held that office longer than almost anyone. Her knowledge and commitment are well known throughout the world. It is unfair of the Opposition to say that our commitment to the Commonwealth is somewhat half-hearted. My right hon. and noble Friend is a living example of that commitment.
The hon. Member for Cynon Valley (Mrs. Clwyd) mentioned Indonesia. I do not say "as usual", because her beliefs are sincere. She knows that we shall look carefully at her accusations in the light of the National Audit Office report, which is due in the reasonably near future, perhaps in just a few weeks' time.
The hon. Member for Hackney, North and Stoke Newington (Ms Abbott) said that Ministers decry and run down the Commonwealth. I can tell her in the politest terms that that is absolute rubbish. I attended the Commonwealth Parliamentary Association meeting in Sri Lanka recently, as did my hon. Friend the Member for Salisbury (Mr. Key) and hon. Members on both sides of the House. Anyone who attended that conference knows not only that the Commonwealth is healthy, but that British representatives there—including Ministers—feel that the Commonwealth is extremely important. We value it as a vital and unique worldwide family of nations.
The hon. Lady also mentioned aid to the Caribbean. I understand her special pleading for the Caribbean as she made it absolutely clear. As I said in my opening speech, there are still major needs in the Caribbean and I can assure her that the Caribbean and the wider Commonwealth are close to the Government's heart. She


may rest assured that we shall not turn our back on it when we have assessed the amount of money that goes to that part of the world. The figures will be announced in the reasonably near future.
At the start of the debate, I said that the United Kingdom will continue to maintain a substantial aid programme. It will amount to £2.15 billion next year, more than £2.2 billion in 1997–98 and nearly £2.3 billion in 1998–99. As I have said, the full details will be in the next departmental report.
As I have also said before, bilateral aid next year will be roughly in line with our previously published plans. Africa is likely to receive more than we had previously planned, largely because of reductions in our expenditure forecasts regarding a number of international organisations. For example, the United Kingdom assessed contribution to the European development fund is likely to be £40 million less in 1996–97 than was forecast last year. That means, not that our commitment to those organisations has diminished, but that our contributions are determined by factors such as exchange rates and relative GNP. It also means that we can maintain a high level of bilateral spending, and it demonstrates the Government's determination to maintain a substantial and effective bilateral programme.
As I explained, we get excellent value for money from the £2.2 billion that we spend on aid in one of the world's most effective official programmes. The programme commands widespread public support, yet the Opposition continue to criticise and belittle our achievements instead of taking pride in work that is well done. They tell us to spend more, as they do in every debate that touches on public spending, yet they have failed to make any commitment on spending. Nor have they said where any extra resources would come from. Until they reveal their policy on spending, how can we believe them?
The skills built up in the official programme and by the NGOs are a British success story. Our commitment to a high-quality programme is beyond doubt. It is now stronger and more effective than ever before. The hon. Member for Carrick, Cumnock and Doon Valley said that he gave a commitment earlier. If he gave a commitment, he did not mention money. As so often, it was just wind. If the hon. Gentleman would like to fill in the blanks, we should be grateful. In the meantime, we will help the world, and I invite the House to support the amendment in the name of my right hon. Friend the Prime Minister.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 270, Noes 310.

Division No. 40]
[9.59 pm


AYES


Abbott Ms Diane
Bayley, Hugh


Adams, Mrs Irene
Beckett, Rt Hon Margaret


Ainger, Nick
Beith, Rt Hon A J


Allen, Graham
Bell, Stuart


Anderson, Donald (Swansea E)
Benn, Rt Hon Tony


Anderson, Ms Janet (Ros'dale)
Bennett, Andrew F


Armstrong, Hilary
Benton, Joe


Ashdown, Rt Hon Paddy
Bermingham, Gerald


Ashton, Joe
Berry, Roger


Austin-Walker, John
Betts, Clive


Banks, Tony (Newham NW)
Blunkett, David


Barnes, Harry
Boateng, Paul


Battle, John
Bradley, Keith





Bray, Dr Jeremy
Grocott, Bruce


Brown, Gordon (Dunfermline E)
Gunnell, John


Brown, N (N'ctle upon Tyne E)
Hain, Peter


Bruce, Malcolm (Gordon)
Hall, Mike


Burden, Richard
Hanson, David


Byers, Stephen
Hardy, Peter


Callaghan, Jim
Henderson, Doug


Campbell, Mrs Anne (C'bridge)
Heppell, John


Campbell, Menzies (Fife NE)
Hill, Keith (Streatham)


Campbell, Ronnie (Blyth V)
Hinchliffe, David


Campbell-Savours, D N
Hodge, Margaret


Canavan, Dennis
Hoey, Kate


Cann, Jamie
Hogg, Norman (Cumbernauld)


Carlile, Alexander (Montgomery)
Home Robertson, John


Chidgey, David
Hood, Jimmy


Chisholm, Malcolm
Hoon, Geoffrey


Church, Judith
Howarth, Alan (Strat'rd-on-A)


Clapham, Michael
Howarth, George (Knowsley North)


Clarke, Eric (Midlothian)
Howells, Dr Kim (Pontypridd)


Clelland, David
Hoyle, Doug


Clwyd, Mrs Ann
Hughes, Robert (Aberdeen N)


Cohen, Harry
Hughes, Roy (Newport E)


Connarty, Michael
Hughes, Simon (Southwark)


Cook, Robin (Livingston)
Hutton, John


Corbett, Robin
Illsley, Eric


Corbyn, Jeremy
Ingram, Adam


Corston, Jean
Jackson, Glenda (H'stead)


Cousins, Jim
Jackson, Helen (Shef'ld, H)


Cox, Tom
Jamieson, David


Cummings, John
Janner, Greville


Cunliffe, Lawrence
Johnston, Sir Russell


Cunningham, Jim (Covy SE)
Jones, Barry (Alyn and D'side)


Cunningham, Roseanna
Jones, Ieuan Wyn (Ynys Môn)


Dafis, Cynog
Jones, Jon Owen (Cardiff C)


Dalyell, Tam
Jones, Lynne (B'ham S O)


Darling, Alistair
Jones, Martyn (Clwyd, SW)


Davidson, Ian
Jones, Nigel (Cheltenham)


Davies, Bryan (Oldham C'tral)
Jowell, Tessa


Davies, Chris (L'Boro & S'worth)
Keen, Alan


Davies, Rt Hon Denzil (Llanelli)
Kennedy, Jane (L'pool Br'dg'n)


Davies, Ron (Caerphilly)
Khabra, Piara S


Davis, Terry (B'ham, H'dge H'l)
Kilfoyle, Peter


Denham, John
Lestor, Joan (Eccles)


Dewar, Donald
Liddell, Mrs Helen


Dixon, Don
Litherland, Robert


Dobson, Frank
Livingstone, Ken


Donohoe, Brian H
Lloyd, Tony (Stretford)


Dowd, Jim
Llwyd, Elfyn


Dunwoody, Mrs Gwyneth
Loyden, Eddie


Eagle, Ms Angela
Lynne, Ms Liz


Eastham, Ken
McAllion, John


Etherington, Bill
McAvoy, Thomas


Evans, John (St Helens N)
McCartney, Robert


Ewing, Mrs Margaret
McFall, John


Fatchett, Derek
McKelvey, William


Faulds, Andrew
Mackinlay, Andrew


Field, Frank (Birkenhead)
McLeish, Henry


Flynn, Paul
McNamara, Kevin


Foster, Rt Hon Derek
MacShane, Denis


Foster, Don (Bath)
McWilliam, John


Foulkes, George
Madden, Max


Fyfe, Maria
Maddock, Diana


Galbraith, Sam
Mahon, Alice


Galloway, George
Mandelson, Peter


Gapes, Mike
Marek, Dr John


Garrett, John
Marshall, David (Shettleston)


George, Bruce
Marshall, Jim (Leicester, S)


Gerrard, Neil
Martin, Michael J (Springburn)


Gilbert, Rt Hon Dr John
Martlew, Eric


Godman, Dr Norman A
Maxton, John


Godsiff, Roger
Meacher, Michael


Golding, Mrs Llin
Meale, Alan


Gordon, Mildred
Michael, Alun


Grant, Bernie (Tottenham)
Michie, Bill (Sheffield Heeley)


Griffiths, Nigel (Edinburgh S)
Michie, Mrs Ray (Argyll & Bute)


Griffiths, Win (Bridgend)
Milburn, Alan






Miller, Andrew
Sheerman, Barry


Mitchell, Austin (Gt Grimsby)
Sheldon, Rt Hon Robert


Moonie, Dr Lewis
Shore, Rt Hon Peter


Morgan, Rhodri
Short, Clare


Morley, Elliot
Simpson, Alan


Morris, Rt Hon Alfred (Wy'nshawe)
Skinner, Dennis


Morris, Estelle (B'ham Yardley)
Smith, Andrew (Oxford E)


Morris, Rt Hon John (Aberavon)
Smith, Chris (Isl'ton S & F'sbury)


Mowlam, Marjorie
Smith, Llew (Blaenau Gwent)


Mudie, George
Snape, Peter


Mullin, Chris
Spearing, Nigel


Murphy, Paul
Spellar, John


Nicholson, Emma (Devon West)
Squire, Rachel (Dunfermline W)


Oakes, Rt Hon Gordon
Steel, Rt Hon Sir David


O'Brien, Mike (N W'kshire)
Steinberg, Gerry


O'Brien, William (Normanton)
Stevenson, George


O'Hara, Edward
Stott, Roger


Olner, Bill
Strang, Dr. Gavin


O'Neill, Martin
Straw, Jack


Orme, Rt Hon Stanley
Sutcliffe, Gerry


Parry, Robert
Taylor, Mrs Ann (Dewsbury)


Pearson, Ian
Taylor, Matthew (Truro)


Pendry, Tom
Thompson, Jack (Wansbeck)


Pickthall, Colin
Timms, Stephen


Pike, Peter L
Tipping, Paddy


Pope, Greg
Touhig, Don


Powell, Ray (Ogmore)
Turner, Dennis


Prentice, Bridget (Lew'm E)
Tyler, Paul


Prentice, Gordon (Pendle)
Vaz, Keith


Prescott, Rt Hon John
Walker, Rt Hon Sir Harold


Primarolo, Dawn
Walley, Joan


Purchase, Ken
Wardell, Gareth (Gower)


Quin, Ms Joyce
Wareing, Robert N


Radice, Giles
Welsh, Andrew


Randall, Stuart
Wicks, Malcolm


Raynsford, Nick
Wigley, Dafydd


Reid, Dr John
Williams, Rt Hon Alan (Sw'n W)


Rendel, David
Williams, Alan W (Carmarthen)


Robertson, George (Hamilton)
Wilson, Brian


Robinson, Geoffrey (Co'try NW)
Winnick, David


Roche, Mrs Barbara
Wise, Audrey


Rogers, Allan
Worthington, Tony


Rooker, Jeff
Wray, Jimmy


Ross, Ernie (Dundee W)
Wright, Dr Tony


Rowlands, Ted



Ruddock, Joan
Tellers for the Ayes:


Sedgemore, Brian
Mr. Robert Ainsworth and



Ms Ann Coffey.




NOES


Ainsworth, Peter (East Surrey)
Booth, Hartley


Aitken, Rt Hon Jonathan
Boswell, Tim


Alexander, Richard
Bottomley, Peter (Eltham)


Alison, Rt Hon Michael (Selby)
Bottomley, Rt Hon Virginia


Allason, Rupert (Torbay)
Bowden, Sir Andrew


Amess, David
Bowis, John


Arbuthnot, James
Boyson, Rt Hon Sir Rhodes


Arnold, Jacques (Gravesham)
Brandreth, Gyles


Arnold, Sir Thomas (Hazel Grv)
Brazier, Julian


Ashby, David
Bright, Sir Graham


Atkins, Rt Hon Robert
Brooke, Rt Hon Peter


Atkinson, David (Bour'mouth E)
Brown, M (Brigg & Cl'thorpes)


Atkinson, Peter (Hexham)
Browning, Mrs Angela


Baker, Nicholas (North Dorset)
Bruce, Ian (Dorset)


Baldry, Tony
Budgen, Nicholas


Banks, Matthew (Southport)
Burns, Simon


Banks, Robert (Harrogate)
Burt, Alistair


Bates, Michael
Butcher, John


Batiste, Spencer
Butler, Peter


Beggs, Roy
Butterfill, John


Bellingham, Henry
Carlisle, John (Luton North)


Bendall, Vivian
Carlisle, Sir Kenneth (Lincoln)


Beresford, Sir Paul
Carrington, Matthew


Biffen, Rt Hon John
Carttiss, Michael


Body, Sir Richard
Cash, William


Bonsor, Sir Nicholas
Channon, Rt Hon Paul





Chapman, Sir Sydney
Harris, David


Churchill, Mr
Haselhurst, Sir Alan


Clappison, James
Hawkins, Nick


Clark, Dr Michael (Rochford)
Hawksley, Warren


Clarke, Rt Hon Kenneth (Ru'clif)
Hayes, Jerry


Clifton-Brown, Geoffrey
Heald, Oliver


Coe, Sebastian
Heathcoat-Amory, David


Colvin, Michael
Hendry, Charles


Congdon, David
Heseltine, Rt Hon Michael


Conway, Derek
Hicks, Robert


Coombs, Anthony (Wyre For'st)
Higgins, Rt Hon Sir Terence


Coombs, Simon (Swindon)
Hill, James (Southampton Test)


Cope, Rt Hon Sir John
Hogg, Rt Hon Douglas (G'tham)


Cormack, Sir Patrick
Horam, John


Couchman, James
Hordern, Rt Hon Sir Peter


Cran, James
Howard, Rt Hon Michael


Currie, Mrs Edwina (S D'by'ire)
Howell, Rt Hon David (G'dford)


Curry, David (Skipton & Ripon)
Howell, Sir Ralph (N Norfolk)


Davies, Quentin (Stamford)
Hughes, Robert G (Harrow W)


Day, Stephen
Hunt, Rt Hon David (Wirral W)


Deva, Nirj Joseph
Hunt, Sir John (Ravensbourne)


Devlin, Tim
Hunter, Andrew


Dicks, Terry
Hurd, Rt Hon Douglas


Dorrell, Rt Hon Stephen
Jack, Michael


Douglas-Hamilton, Lord James
Jackson, Robert (Wantage)


Dover, Den
Jenkin, Bernard


Duncan, Alan
Jessel, Toby


Duncan-Smith, Iain
Jones, Gwilym (Cardiff N)


Dunn, Bob
Jones, Robert B (W Hertfdshr)


Durant, Sir Anthony
Kellett-Bowman, Dame Elaine


Dykes, Hugh
Key, Robert


Eggar, Rt Hon Tim
King, Rt Hon Tom


Elletson, Harold
Kirkhope, Timothy


Emery, Rt Hon Sir Peter
Knapman, Roger


Evans, David (Welwyn Hatfield)
Knight, Mrs Angela (Erewash)


Evans, Jonathan (Brecon)
Knight, Rt Hon Greg (Derby N)


Evans, Nigel (Ribble Valley)
Knight, Dame Jill (Bir'm E'st'n)


Evans, Roger (Monmouth)
Knox, Sir David


Evennett, David
Kynoch, George (Kincardine)


Faber, David
Lait, Mrs Jacqui


Fabricant, Michael
Lamont, Rt Hon Norman


Fenner, Dame Peggy
Lang, Rt Hon Ian


Field, Barry (Isle of Wight)
Lawrence, Sir Ivan


Fishburn, Dudley
Legg, Barry


Forman, Nigel
Leigh, Edward


Forsythe, Clifford (S Antrim)
Lennox-Boyd, Sir Mark


Forth, Eric
Lester, Sir James (Broxtowe)


Fowler, Rt Hon Sir Norman
Lidington, David


Fox, Dr Liam (Woodspring)
Lilley, Rt Hon Peter


Fox, Sir Marcus (Shipley)
Lloyd, Rt Hon Sir Peter (Fareham)


Freeman, Rt Hon Roger
Lord, Michael


French, Douglas
Luff, Peter


Gale, Roger
Lyell, Rt Hon Sir Nicholas


Gallie, Phil
McCrea, The Reverend William


Gardiner, Sir George
MacGregor, Rt Hon John


Garel-Jones, Rt Hon Tristan
MacKay, Andrew


Garnier, Edward
Maclean, Rt Hon David


Gill, Christopher
McNair-Wilson, Sir Patrick


Gillan, Cheryl
Madel, Sir David


Goodlad, Rt Hon Alastair
Maitland, Lady Olga


Goodson-Wickes, Dr Charles
Malone, Gerald


Gorman, Mrs Teresa
Mans, Keith


Gorst, Sir John
Marland, Paul


Grant, Sir A (SW Cambs)
Marlow, Tony


Greenway, Harry (Ealing N)
Marshall, John (Hendon S)


Greenway, John (Ryedale)
Marshall, Sir Michael (Arundel)


Griffiths, Peter (Portsmouth, N)
Martin, David (Portsmouth S)


Grylls, Sir Michael
Mates, Michael


Gummer, Rt Hon John Selwyn
Mawhinney, Rt Hon Dr Brian


Hague, Rt Hon William
Mellor, Rt Hon David


Hamilton, Rt Hon Sir Archibald
Merchant, Piers


Hamilton, Neil (Tatton)
Mills, Iain


Hampson, Dr Keith
Mitchell, Andrew (Gedling)


Hanley, Rt Hon Jeremy
Mitchell, Sir David (NW Hants)


Hannam, Sir John
Moate, Sir Roger


Hargreaves, Andrew
Monro, Rt Hon Sir Hector






Montgomery, Sir Fergus
Stanley, Rt Hon Sir John


Moss, Malcolm
Steen, Anthony


Needham, Rt Hon Richard
Stephen, Michael


Nelson, Anthony
Stern, Michael


Neubert, Sir Michael
Stewart, Allan


Newton, Rt Hon Tony
Streeter, Gary


Nicholls, Patrick
Sumberg, David


Nicholson, David (Taunton)
Sweeney, Walter


Norris, Steve
Sykes, John


Onslow, Rt Hon Sir Cranley
Tapsell, Sir Peter


Oppenheim, Phillip
Taylor, Ian (Esher)


Page, Richard
Taylor, John M (Solihull)


Paice, James
Taylor, Sir Teddy (Southend, E)


Patnick, Sir Irvine
Temple-Morris, Peter


Patten, Rt Hon John
Thomason, Roy


Pattie, Rt Hon Sir Geoffrey
Thompson, Sir Donald (C'er V)


Pawsey, James
Thompson, Patrick (Norwich N)


Peacock, Mrs Elizabeth
Thornton, Sir Malcolm


Pickles, Eric
Thurnham, Peter


Porter, Barry (Wirral S)
Townend, John (Bridlington)


Porter, David (Waveney)
Townsend, Cyril D (Bexl'yh'th)


Portillo, Rt Hon Michael
Tracey, Richard


Powell, William (Corby)
Tredinnick, David


Rathbone, Tim
Trend, Michael


Redwood, Rt Hon John
Trotter, Neville


Renton, Rt Hon Tim
Twinn, Dr Ian


Richards, Rod
Vaughan, Sir Gerard


Riddick, Graham
Waldegrave, Rt Hon William


Robathan, Andrew
Walden, George


Roberts, Rt Hon Sir Wyn
Walker, Bill (N Tayside)


Robertson, Raymond (Ab'd'n S)
Waller, Gary


Robinson, Mark (Somerton)
Ward, John


Roe, Mrs Marion (Broxbourne)
Wardle, Charles (Bexhill)


Ross, William (E Londonderry)
Waterson, Nigel


Rowe, Andrew (Mid Kent)
Watts, John


Rumbold, Rt Hon Dame Angela
Wells, Bowen


Sackville, Tom
Wheeler, Rt Hon Sir John


Sainsbury, Rt Hon Sir Timothy
Whitney, Ray


Scott, Rt Hon Sir Nicholas
Whittingdale, John


Shaw, David (Dover)
Widdecombe, Ann


Shaw, Sir Giles (Pudsey)
Wiggin, Sir Jerry


Shephard, Rt Hon Gillian
Wilkinson, John


Shepherd, Sir Colin (Hereford)
Willetts, David


Shepherd, Richard (Aldridge)
Wilshire, David


Sims, Roger
Winterton, Mrs Ann (Congleton)


Skeet, Sir Trevor
Winterton, Nicholas (Macc'f'ld)


Smith, Sir Dudley (Warwick)
Wolfson, Mark


Smith, Tim (Beaconsfield)
Wood, Timothy


Soames, Nicholas
Yeo, Tim


Spencer, Sir Derek
Young, Rt Hon Sir George


Spicer, Sir James (W Dorset)



Spicer, Sir Michael (S Worcs)



Spink, Dr Robert
Tellers for the Noes:


Spring, Richard
Mr. Patrick McLoughlin and


Sproat, Iain
Mr. Richard Ottaway.


Squire, Robin (Hornchurch)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House acknowledges the United Kingdom's important role in helping reduce poverty and suffering in poorer countries and commends the Government for maintaining a substantial and effective aid programme which is the fifth largest in the world; applauds the Government's intention to maintain a bilateral aid programme next year which will be as large as that which had been previously planned; welcomes the central role the United Kingdom plays in seeking to make multilateral aid more effective; and commends the Government for the increasing poverty focus of the aid programme and for the leading role it has played in seeking a comprehensive solution to the debt burden of the poorest countries.

Police Grant Report

Mr. Andrew F. Bennett: On a point of order, Mr. Deputy Speaker. You will note that the Order Paper says that the Select Committee on Statutory Instruments has not considered this report. May I inform the House that we considered it this afternoon, that we found nothing wrong with it and that we therefore have nothing to report?
However, I make the point to business managers on both sides of the House, who expect the Select Committee to scrutinise statutory instruments such as this, that they should wait until we have scrutinised them before they arrange debates in the House, and that the time from 4.30 pm until now would be short if the House expected us to produce a report, and hon. Members to be able to read it. Although on this occasion we have nothing to report, I hope that the business managers will take it into account that that should not happen as a regular practice.

Mr. Deputy Speaker (Mr. Michael Morris): I am grateful to the hon. Gentleman for the information that he has imparted to hon. Members through the occupant of the Chair.

The Minister of State, Home Office (Mr. David Maclean): I beg to move,
That the Police Grant Report (England and Wales) 1996–97 (House of Commons Paper No. 162), which was laid before this House on 29th January, be approved.
It is a matter of great personal satisfaction to be opening this debate on police funding. Once again, I can come to the House and tangibly demonstrate the strength of the Government's commitment to the police service in England and Wales.
Since 1978–79, police strength will have increased by more than 16,000. Civilian strength has increased by more than 17,000. Expenditure has increased from just over £1 billion to £6.8 billion—96 per cent in real terms. Since the last election alone, the number of constables in forces has increased by 1,313, boosting the number of bobbies on the beat.

Mr. Mike O'Brien: Not in Warwickshire, it has not. We have lost more than 60 officers from our old establishment rate during the current year, and we expect to lose up to 70 officers. Is that a record of which the Minister can be proud? Is he proud of underfunding Warwickshire constabulary by more than £6 million? What does he intend to do about that?

Mr. Maclean: The hon. Gentleman will naturally speak out for his constituency and county—that is his job—and he will try and make the best possible fist of it. He must bear in mind, however, that the funding for Warwickshire went up more than 5 per cent. last year, that Warwickshire has a 3.5 per cent. increase in central Government funding this year, and that Warwickshire police can spend up to 3.9 per cent. more this year if they set their budget at the maximum level. At a time when inflation is so low and when officers' pay, which is the biggest component of a police force's expenditure, has increased by only 3 per cent. —civilian pay has increased by even less—an


increase of almost 4 per cent. for the police in Warwickshire is generous, and it is in line with the national average increase.

Mr. Barry Jones: Page 14 of the report refers to indicators such as long-term unemployment and young male unemployment. I associate those two paragraphs with a problem which exists throughout the land, in every village and town where there are unemployed young men who create a nuisance, harassing older citizens and people in small village shops. Does the report contain any hope for us in tackling that real problem?

Mr. Maclean: If I have got the hon. Gentleman's county correct, he represents the North Wales police force area, which this year received a 5.1 per cent. increase, or certainly its budget can increase by 5.1 per cent. Not many other sectors of Government or local government can increase their expenditure by that amount this year. I must make the point again that police civilian pay is increasing by 2.5 per cent. and uniformed bobby pay by 3 per cent., and the average increase in police pay is about 2.8 per cent. For a police force that receives 5.1 per cent. more, that is a considerable advantage.

Mr. Patrick Thompson: Before my right hon. Friend gets away from the initial figures that he was giving, will he confirm that the considerable extra money for Norfolk—some £286,000—has made it possible for the Norfolk police authority considerably to increase the number of policemen? Will he also congratulate the chief constable of the Norfolk constabulary on the excellent work being done there and on the reputation that the constabulary is building up in the local area?

Mr. Maclean: Of course I congratulate Norfolk. One has only to look at its latest crime figures to see the tremendous success that the chief constable and all his officers have achieved. Of course Norfolk will have an extra 6 per cent. this year to build on that considerable success.

Several hon. Members: rose—

Mr. Maclean: I would happily stay here all night to take interventions because it is good news from the Government's point of view. I would talk until 2 am if time allowed, but I am conscious that other hon. Members wish to speak.

Mr. Elfyn Llwyd: The Minister referred to the extra money for the North Wales police. There was an extra £200,000 revenue, but is the Minister aware—he should be—that capital has been decreased from £1.596 million to £1.33 million for the coming year? That means, in effect, that there will be no extra policemen on the beat and that any extra expenditure on capital will have to come from revenue. In fairness to the Minister, he responded positively on the revenue side, but that has been negated on the capital side.

Mr. Maclean: Not at all—I shall be coming to that point. I should make it clear, however, that there is no

linkage between revenue and capital. I should think that the hon. Gentleman's electors and constituents in the North Wales police area would be rather upset if they found that money was being switched from the funding of bobbies to capital expenditure, particularly since we have protected all major capital works and are encouraging the private finance initiative. I shall come to that in a couple of minutes, if I can make some progress.
I was reminding the House that since the last general election the number of constables has increased by 1,313. They are bobbies on the beat, not bobbies behind desks. In relation to the settlement, a total of £6.8 billion will be available for policing next year, which includes £200 million for capital expenditure. That is an increase of £240 million, or nearly 4 per cent. That increase underlines our commitment to law and order and to tackling crime, and it ensures that the police service can sustain the momentum of its recent successes.
As the Association of Chief Police Officers said in its press release welcoming the settlement last November,
a settlement that is above the rate of inflation shows that the Government recognises the special needs of the police service.
There is an extra £100 million in the settlement for police pay, which is a 3 per cent. increase on the police pay bill of £3.4 billion. There is an extra £80 million for police pensions, and £60 million more for civilian pay and other price increases. As for capital, we shall be supporting total capital expenditure of £228 million in 1996–97. That will maintain all specific police building projects, just as ACPO wanted.
Some have suggested that the funding that my right hon. Friend the Prime Minister announced for 5,000 extra police officers during the next three years is at the expense of capital funding. There is no such linkage. There will be no enforced cuts in the programme for major building projects. There is no reason why the funding available for extra police officers should be used for capital spending. In fact, police authorities now have the opportunity to extend their capital programmes through the private finance initiative.
The fundamental objective of the PFI is to secure the best possible use of capital resources at best value for the public sector—in this case, for the police service. The public sector does not have a monopoly of knowledge. In many situations, the private sector will have skills and expertise that can help to deliver better deals for the police. Capital resources for the police come in many forms: building, plant, vehicles, equipment and computer software, for example. We want the police to explore the new opportunity that the PFI can offer in making them more efficient and effective.
The private finance initiative is not a substitute for conventional capital spending. It is an exciting new opportunity for the police to enhance, and indeed extend, their capital resources. For example, Derbyshire is inviting private sector proposals to build, design, finance and operate a replacement police station and I congratulate it on that initiative.

Mr. Don Touhig: The Minister wrote to me in November advising me that an extra £2.5 million was to be made available to the Gwent police force this year. He has assured the House this evening that capital will not be put at risk as a result of that settlement. What extra provision is being made for the Gwent police force to take


over the buildings in the Rhymney valley—I understand that the Minister is aware that they are in a seriously deficient state—and bring them up to scratch?

Mr. Maclean: The hon. Gentleman has mentioned the £2.5 million in capital that we have been able to allocate. I had an excellent meeting with Gwent police authority recently and we discussed the matter to which the hon. Gentleman referred. I am very conscious of the state of the buildings that it has taken over from the South Wales police force. I was able to give the assurance that if—and it has to be if—we have surplus capital resources, I will consider the buildings in Gwent to be among our top priorities. I said that I would do my utmost to find extra capital for the force if it were at all possible.
We also discussed the private finance initiative and looked at the possibilities for Gwent. One particular possibility is in Ystrad—

Mr. Touhig: Ystrad Mynach.

Mr. Maclean: Ystrad Mynach. Some Celts cannot pronounce other Celtic languages. We have offered Gwent police authority help and assistance. If we can help and advise it to put together a private finance initiative, we shall be delighted to do so.
I know that other police authorities are considering a whole range of projects, from major headquarters, to operational buildings such as police stations, to specialist facilities such as firearms training. They will give the private sector the flexibility to design solutions in response to forces' own needs. That in turn will provide forces with increased scope for value for money.

Mr. George Walden: My right hon. Friend and my right hon. and learned Friend the Home Secretary have taken a close interest in the affairs of the Thames Valley force, and all its problems, including pensions. I am therefore extremely grateful—as I think are my colleagues in Buckinghamshire—for the resolution of those problems and for the overall 4.8 per cent increase. No one can complain about that. However, I am going to complain. Could my right hon. Friend possibly see his way to giving a further boost to secure accommodation for under-age criminals, who are causing—even in remote and idyllic parts of north Buckinghamshire—

Mr. Andrew Mackinlay: It is not unique to that county.

Mr. Walden: Precisely. Those under-age criminals are causing disproportionate damage. If, in a very humane and educational way, they could be shut away, crime would go down—

Mr. Deputy Speaker: Order. That is a disproportionately long intervention. I hope that the hon. Gentleman is winding up.

Mr. Walden: If they were shut away, my right hon. Friend would be able to get away next time with less than a 4.8 per cent. increase.

Mr. Maclean: I give my hon. Friend the assurance that he seeks. We are pushing two strands of extra secure accommodation for young offenders—through the local authority route and through secure training centres.
I announced at the start of the debate that £6.8 billion would be available for policing in 1996–97. The distribution of funding between individual police authorities is naturally of great interest to the House and to the public, so I shall explain briefly how it is done.
The bulk of the funding is allocated according to the new needs-based formula, which was introduced for the first time last year. The police service and the Audit Commission have long argued for an objective approach to funding. The formula is aimed at producing such an approach. We are committed to its development.
The formula uses independent demographic statistics to predict each force's relative needs for resources. Hon. Members will be only too aware of the concerns which last year accompanied the introduction of the formula. As I promised then, we have worked hard to improve the formula. Independent consultants from Price Waterhouse audited the formula and concluded that it was technically sound, but that further work was needed on a number of aspects. That has been done by a Home Office-led group of police service and police authority representatives. Not all the work has been concluded, but we have still been able to make changes to the formula for 1996–97.
The formula's establishment element has been reduced from 50 per cent. to 40 per cent. We always intended that establishments should be in the formula only on a transitional basis, and we shall continue to remove establishments from the formula at whatever rate proves to be compatible with the ability to keep stability in policing.
We recognised last year's widespread concerns about provision for police pensions, so we did two things. First, we got police authority representatives to help us to estimate what pensions expenditure would be in 1996–97. The prediction was £800 million—£80 million more than authorities are spending this year—so we put an extra £80 million into the police settlement for pensions next year. Secondly, we changed the funding formula. Now the whole £800 million—about 12.3 per cent. of total police funding—is allocated according to forces' pension needs. Those needs are estimated by the Government Actuary's department, so while we were about it we got some police forces to provide new pensions data to help us to improve the Government Actuary's pensions model. Now we are asking all forces to help us, so that next year we can make the pensions model better still. That raft of improvements in the treatment of pensions expenditure has substantially enhanced the police funding formula's transparency and acceptability.
We have also introduced a sparsity factor, according to which we shall allocate 0.5 per cent. of available funding. For next year it has been done on a judgmental basis similar to that which occurs with other funding formulae such as the education standard spending assessment. The results of research in that area are not conclusive.

Mr. David Faber: My right hon. Friend mentioned the problems and the concerns that were expressed when the funding formula was introduced last year. I hope that he will accept the grateful thanks of my constituents in Wiltshire, because we have seen a generous rise in the police grant this year compared with


last year, but will he continue to pay careful attention to the factor for rural sparsity, which adversely affects counties such as mine?

Mr. Maclean: I agree entirely with my hon. Friend. The argument of rural forces, that there are particular costs involved in policing their areas, is persuasive. Clearly there are much greater distances to travel, fuel consumption is greater, tyre costs are higher— [Interruption.] Hon. Members may laugh, but they show their ignorance of police operating practices if they scoff at such ideas, considering that— [Interruption.] I shall happily come back to the House on the point if my figures are incorrect, but I believe that police tyre costs in one year run to £20 million, a not insubstantial sum.
The committee of local police authorities has already said that it welcomes and supports the decision on rural sparsity. Further development work will continue in 1996, and our working group of police service and police authority representatives has already met. I shall wait to hear its proposals, but I expect that we shall consider a programme including the examination of new data on police work and pensions, and will want to investigate further the costs of community relations, traffic policing and operating in rural and urban areas.
Outside the formula, an additional rule ensures that all forces—except the Metropolitan police, for which other arrangements have been made—can receive at least 3 per cent. more funding next year than this year. That rule derives from our belief that it is important to maintain public confidence in policing. In particular, we consider it important for public confidence that police authorities should be seen as able to provide at least the same service in 1996–97 as they did last year. At a time when police authority pay bills are 3 per cent. —the percentage is lower for civilian staff—the 3 per cent. rule reassures the public that their policing service will be maintained.
I have already reminded hon. Members of the commitment made by the Prime Minister to provide funding for 5,000 extra police officers over the next three years. To describe that, there are no words better than those of the chairman of the Police Federation, who said that it was
a tremendous boost to the service".
In 1996–97 forces will receive the first block of that funding—£20 million. That will help them to meet their key objective of providing high visibility policing. How they do it will be for them to decide, but in whichever way it is done, police forces will be able to ensure that they are more visible to the public whom they serve. That public is therefore the basis for allocating the funding. The resident and daytime populations of each force area determine that force's share of the £20 million. This is the additional rule No. 2 set out in the police grant report.

Dr. John Marek: To return to the North Wales force, is it true that the increase in the money available for extra policemen and women in the coming year will exactly match the decline in real terms in the police grant available for capital purposes? Is the Minister not robbing Peter to pay Paul? Does he agree that there is no point in having extra policemen if they are not given the funding to do the job properly?

Mr. Maclean: I am surprised at the hon. Gentleman, who has shown uncustomary ignorance about what I said a moment ago about the private finance initiative. There is no need for the North Wales police force to reduce its capital expenditure in the future if it uses the PFI. Other police forces are exploring that option, which will allow forces to have more buildings and more money to spend on capital projects. We must break out—as other areas of Government are doing—from the notion that unless the Government provide every penny of capital, then no other source of capital expenditure is available.
In revenue terms, the North Wales police force has received 5 per cent. this year—way above the national average for police funding. I suspect that that puts that force in the top quarter of all forces in terms of funding, and that is very generous. Hon Members from the North Wales police force area have no cause for complaint about the settlement in their area.

Mr. Harry Barnes: rose—

Mr. Maclean: Nor have hon. Members from Derbyshire any cause for complaint, as the settlement for that area was more than 4 per cent.

Mr. Barnes: Will the Minister give way on that point?

Mr. Maclean: No. Hon Members will have a chance to make their own speeches, and I wish to conclude in a moment.
The three elements that I have mentioned—the needs-based formula, the 3 per cent. rule and the extra officers rule—determine the allocations of police grant. The same needs-based formula determines the police standard spending assessment for each force. Police forces also receive a capital financing SSA and, where appropriate, an SSA reduction grant.
I stress that these are methods for carving up the total available funding, and are not prescriptions for the way in which funding must be spent in each force. That is quite rightly to be decided locally, and the granting of that local discretion was one of the key reforms in the Police and Magistrates' Courts Act 1994. We have no intention now of trying to intervene to change that.
I have set out tonight an excellent settlement for the police service and a fair distribution of that settlement between the 43 police forces in England and Wales. Let me remind the House what we have done. We have allocated 4 per cent. more money, and forces will get at least 3 per cent. more—some will get much more than that. Forces will be able to recruit at least 1,000 more constables to add to the 900 constables that they have recruited this year. We have listened to criticisms of the funding formula and we have acted. There is more for pensions, rural sparsity has been taken into account and the out-dated establishment factor has been reduced.
We have made progress since last year, and we will make more next year. But I believe that the report will give us in 1996–97 a police service that is both well and fairly funded. That should be a cause for satisfaction on both sides of the House, because it falls to the police service to make the bravest and most crucial contribution to the task of turning the tables on the criminal. I command—or rather, I commend the report to the House.

Mr. Alun Michael: I am sure that the Minister of State would like to command this House—he has a remarkable talent for making complacency sound dramatic. He said that the chairman of the Police Federation welcomed the promise of 5,000 extra policemen. Indeed he did, but that was before the Police Federation looked at the detail. I wonder whether the Minister will take so seriously the comments that the Police Federation has made since it looked in detail at the settlement. The federation is very doubtful about the reality of that promise and it is right to be suspicious , as the Government have reneged on their promise at the 1992 general election to increase the number of police officers by 1,000. Indeed, by September 1995, the number of police officers had gone down by 470 compared with the figure in March 1992.
When the Government have failed signally to deliver the promise that they made at the last general election, is it any surprise that there is some suspicion when they say that they are going to deliver a promise of 5,000 additional police officers?

Mr. Walter Sweeney: Does the hon. Gentleman agree that the failure of the South Wales police authority, which is controlled by three local, Labour-controlled county councils, was the real reason for the failure to fund the police in his constituency and in mine? Since the Home Office has given money direct to the police, we have had proper funding—an increase of about 19 per cent. in the past two years.

Mr. Michael: It is nice of the hon. Gentleman to wander in and make that convoluted and inaccurate contribution. The problem with the funding of the South Wales police, as he knows, was the failure of the Welsh Office to deliver its share of the money and, indeed, its determined hiding of the standard spending assessment for the police—a matter that he knows full well was raised in the House on numerous occasions. The hon. Gentleman represents the party that damaged the police in his constituency and in mine.
I have some sympathy with the Joint Committee on Statutory Instruments, which had to consider the document so quickly. As was pointed out—last year, as well as this year—the document was published yesterday, which is surely not an aid to considered debate in the House.
I also agree with my hon. Friend the Member for Alyn and Deeside (Mr. Jones) about the impact of social factors and unemployment on crime, and I shall return to that issue and its element within the formula.
The formula is not as perfect as the Minister of State made out. I thought that I heard him say that he would make whatever changes were necessary to achieve or maintain stability. The difficulty is getting a fair formula that is also stable over time. He was right to highlight the importance of the pensions element in the formula. I hope that that was a sign that he will move in the way that police authorities have requested and make that element accurate and transparent. It is an enormous burden on police authorities and it distorts all the figures year after year.
I also hope that there will be cross-party unity on police funding. The Minister has shown that he has the capacity to achieve that, for example, in relation to the Gwent and South Wales police and in the debates on the Offensive Weapons Bill and the Security Service Bill.
The fact that we have been given inaccurate information on the number of police is a great disappointment. The Minister was selective when he told us that there were 1,313 more constables, because the total number of police officers has decreased. The Government's claims about what they are doing in relation to the police contain two fraudulent elements: first, that they have increased the number of police officers; and, secondly, that they have given £20 million in new money to assist with the recruitment and employment of new officers.
At the time of the Budget, the Home Secretary claimed that he had increased the revenue cash by £20 million, but he had cut by almost £24 million the capital cash projected within the Home Office's plans—a classic case of robbing Peter to pay Peter less. [Interruption.] I am sorry, but I disagree. It is not funny; it is serious. The taking of money from the capital funds of police authorities will cause problems now and in the future.

Mrs. Bridget Prentice: On that point, my hon. Friend is aware that a new police station was due to be built in Lewisham—amid some controversy, but nevertheless it was to be built in 1997. He may not be aware that the assistant commissioner, Ian Johnstone, has told us that there has been a reduction in the resources available for capital expenditure and that the police station will not be built before 1999 at the very earliest. Does that not confirm my hon. Friend's views on the changes between capital and revenue expenditure?

Mr. Michael: Yes—that and the inability to undertake capital maintenance or introduce new technology, which, as we have pointed out a number of times, is essential in increasing the efficiency of the police service and the effectiveness with which officers are deployed on our streets. Although capital finances do not seem to be immediately important, they have an impact on the ability of the police to deliver a quality service to the public.
The total number of police officers decreased—the situation is even worse if we consider the number available for ordinary duty—between 31 March 1992 and 30 September 1995 by 860 in England and Wales.

Mr. Mackinlay: How many?

Mr. Michael: I shall repeat the number for the benefit of my hon. Friend. The number has fallen by 860. When one considers that the Government promised an increase of 1,000, one realises what Conservative promises are worth.
The Home Secretary boasted of handing over the cash and giving freedom to chief constables to choose how to spend it. [HON. MEMBERS: "Hear, hear."] Conservative Members say, "Hear, hear." The point was anticipated in last year's debate when the hon. Member for Ryedale (Mr. Greenway) asked the Minister of State, the right hon. Member for Penrith and The Border (Mr. Maclean), to agree that
if there are fewer police officers on the street after April this year it will be because of the decisions of chief constables, not because of Government funding.
Not surprisingly, the Minister responded:
My hon. Friend is absolutely correct".— [Official Report,31 January 1995; Vol. 253, c. 956.]


The Prime Minister promised to increase the number of police officers by 5,000, apparently unaware that his Government have passed on the responsibility for deciding police numbers to chief constables and police authorities. He did not appear to know that his Government stopped controlling police numbers last year.
There has been a cut in capital finances this year. To be precise, the cut is £24 million in the planning figure that was given in the Home Office report and £17 million in capital, comparing last year with the next financial year. Either way, there is a considerable cut in the amount of capital available to police authorities. The planning cut is more than the amount given for the theoretical purpose of providing additional police officers.

Mr. Mike O'Brien: May I offer my hon. Friend the words of my local newspaper about the Prime Minister's promise in respect of Warwickshire? The Prime Minister promised lots of extra police officers. Warwickshire has lost 60 officers so far and is likely to lose more than 70 this year. As a result of the extra £181,000 that we are getting this year, we will have an extra nine officers. The Bedworth Evening Telegraph described the Prime Minister's promise as "pathetic". I think that that is the best description.

Mr. Michael: My hon. Friend puts it succinctly and well. That is what the overall figures mean when they are translated into the number of police available on the streets in police authorities.
To fill the gap on capital funding, the Minister relies on the private finance initiative. The amount of capital that the Government are making available is not being cut because there is additional money available from the PFI. The Government are predicating a level of capital substitution in an unplanned way by cutting the money available for police authorities before any money has come from the PFI. It may well be that some good and appropriate schemes will arise next year, but that puts pressure on police authorities to go looking for additional capital. There is always a danger that that will distort police priorities and lead them into inappropriate ways of obtaining money.
We are not against the principle of the PFI. Indeed, the deputy leader of the Labour party, my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), was one of the first to give examples of how private money could be harnessed to the public good. However, that needs to be done in an appropriate way. There are concerns about the way in which pressure is being put on the police to find money from private sources.
The Minister quoted one comment by a senior official of the Police Federation. The Police Federation has raised some serious issues in relation to the settlement and the promise of increased funding for police officers. It wants to know from what base the additional officers will be recruited; the total number of officers in service against which the increase is to be compared; to which three-year period the Prime Minister referred; how many additional officers the Government expect police forces to recruit in the 1996–97 financial year; and what the Government assume to be the cost over the next three financial years of recruiting 5,000 additional officers.
The figures that we have seen so far assume the employment of new recruits. As those recruits become experienced police officers, they will cost more each year. Will the Government provide the additional finance to retain those trained officers, so that there is stability in the police forces, or will they simply say that it is a matter for police constables to decide? Last year, the Minister gave police constables and local police authorities the freedom to juggle the figures that they must work with this year. That is causing a dilemma for them— [Interruption.] I am happy to give way to the Minister if he wishes to clarify the issue for us.

Mr. Maclean: I was just saying that that is one of the daftest questions that I have heard in my life. If we are providing finance for extra police officers, obviously we must keep it up. We cannot fund the recruitment of bobbies for just three years and not pay them afterwards. We recognise that, if we recruit extra police officers, they will remain in the service for 25 or 30 years.

Mr. Michael: We shall hold the Minister to that statement when we debate the matter in the next financial year. We have no new money this year; money has been transferred from capital to revenue. The Minister has said only that the Government would find the finance to continue employment. The finance required to maintain the employment of those officers will increase year on year as their experience grows. Perhaps the Minister assumes that he will not be here to account for this matter next year.
A number of my hon. Friends have succinctly raised the problems that exist within their individual police authorities. Particular problems arise in relation to policing in London. This debate takes place against a background of increased crime in the London area, a reduction in the number of police officers, and continuing problems of low clear-up rates in key areas. The use of firearms in London has increased and the Metropolitan police, local authorities and the public are worried about the increased rate of drug misuse and fraud. The Metropolitan police fraud squad conducted 323 inquiries in 1994–95 and reported that the value of letters of credit, bills of exchange and other banking instruments seized by the fraud squad amounted to more than £1,000 million. That is a large sum by any estimate.
In terms of this settlement, the Metropolitan police are likely to use £30 million a year for the next few years. Until 1995–96, the funding of the Metropolitan police was not a problem because the Home Secretary set the Met's standard spending assessment at the same level as he set its budget. With the introduction of the new formula in 1995–96, the Metropolitan police lost about £115 million. It has received an SSA reduction—damping—grant of £85 million, which cushioned the loss in 1995–96 to 2 per cent. In the coming financial year 1996–97, however, the Met loses another £30 million from further changes to the funding formula, particularly the phasing of the "establishment indicator". Those serious losses to the Metropolitan police amount to some £60 million. The matter has caused great concern in our capital city.
In the coming year, the importance of partnership will grow again. That was recognised by the way in which the Home Secretary assessed the key objectives for the coming year, especially No. 3:
To target and prevent crimes which are a particular local problem, including drug-related criminality, in partnership with the public and local agencies.


I note the phraseology. The Government do not appear to be able to use the phrase "local government", which is essential in that local partnership, but the general trend is welcome.
The police must have the resources to be able to play a full part in those local partnerships to reduce and fight crime. We have mentioned the pressure on the police to raise funds in a variety of ways. It is very important that that does not become a distortion in the revenue element of police finances, as it is in capital funding.
I am certain that chief constables and police authorities will seek to concentrate on their core activities and avoid distractions into commercial activity, but there must be a temptation, and removal of £24 million from capital is bound to increase the pressure on them.
In some projects, private finance in partnership is appropriate. I read plans recently for training in arms techniques in synergy with a regional facility for the sport of shooting. Nevertheless, that aspect needs care, and it is important that the Home Office does not disclaim responsibility.
Another important responsibility of the Home Office is that of getting the funding formula right for the long term. All the elements—sparsity of population in some parts of the country, levels of urban crime in others, the impact of pensions, accuracy in specifying the amount of crime that the police are trying to tackle—need to be more accurately reflected in the formula. That has been the subject of representations to the Minister by police authorities and by chief constables. I hope that the Minister only sought to appear over-enthusiastic in his comments tonight, and that he will not be complacent about the quality of the formula that we have achieved to date.
The police need certainty in order to plan to give certainty to the public and in order to tackle crime and its prevention methodically in the long term. They also need to be able to assure police officers whom they recruit that they have a long-term, stable career as an essential part of a service to the public. I hope that the Minister will take that message from tonight's debate.

Sir Ivan Lawrence: I want to tell the House what can be achieved with tight resourcing.
Last year, the chief constable of Staffordshire said:
the overall workload of the Force has continued to increase and there has been no increase in resources to meet it. Our funding for 1995/96, which was fixed by Central Government, gave no opportunity for expansion and barely amounted to a 'standstill' situation, even though the Police Authority allowed us to budget right up to the Home Office 'capping' limit.
It is astonishing what Staffordshire police achieved notwithstanding that tight limit. It achieved an increase in civilian support staff, releasing 21 constables for operational duties; a trunked radio system far in advance of any police radio scheme in the United Kingdom; the provision of new handcuffs, long batons and stab-proof vests, making a valuable contribution to the safety of operational officers; and success in targeting drug dealers and suppliers.
The Audit Commission indicators put Staffordshire above the national average, and surveys have shown a high level of public satisfaction with the service provided by Staffordshire police. That is a substantial record of achievement by a police force that, last year, said that it was strapped for cash.
In the report, Chief Constable Kelly went on to say, very gloomily:
the Home Office are now looking again at their complex funding formula and there is a possibility that, because the formula may in future reflect notional rather than actual workloads, Staffordshire may receive less funding in 1996–97.
He was much too gloomy. The Government support grant for Staffordshire, applying this year's formula, amounts to an increase of no less than 7.5 per cent., from £101.2 million to £108.9 million. That is the largest increase in allocation of all the shire counties in Britain and, as the Burton Mail put it, a "massive rise in resources" that is likely to produce 100 more policemen over the next three years and boost the county's fight against drugs.
I welcome that grant on behalf of my constituents and I know that Chief Constable Kelly and Superintendent Glyn Heyward, the Burton divisional commander, would also want to express their heartfelt thanks. I should like to think that this represents a reward for years of superb policing and it is a tribute to all of those who serve in the Staffordshire force and those who assist it in various ways.
I shall tell the House what has happened to the law and order situation in Burton and Staffordshire as a result of those improvements in service. Crime in Staffordshire has decreased by 15 per cent. in the past two years, with a fall of 14.5 per cent. in Burton alone between January and June last year. There has been a sharp fall not only in the number of burglaries and car crimes but in theft, sex offences and serious violence.
The reduction in crime has been achieved in Burton through 90 neighbourhood watch schemes, which cover 36,000 households, and through the installation of closed circuit television in Burton centre car parks, subsidised to a large extent by the Labour-controlled East Staffordshire borough council, with some—although not enough—contributions from traders and a great deal of encouragement from the Government. The number of car thefts or break-ins has been reduced from six per week in the six car parks to three in six weeks—a decrease of 92 per cent. The town's police commander described the effect of the cameras on crime in the town centre as being "beyond all expectations". He said:
It's like having 17 additional police officers spread around the town centre".
He then added:
More people are coming into the town centre at night believing, correctly, that it is now a safer place to be".
The cameras are also helping to bring offenders to justice, so we can expect the conviction rate to rise.

Mr. Bill Olner: I refer the hon. and learned Gentleman to the excellent scheme that the Labour-controlled council has introduced in his constituency. How much Government money was allocated to CCTV?

Sir Ivan Lawrence: To be fair, I said that East Staffordshire borough council was Labour controlled, but one does not want to go overboard praising that council. After all, it supports the Labour party, whose slogan, "Tough on crime, tough on the causes of crime" has been shown to be a hollow load of hypocritical twaddle. Labour may be tough on the victims, but it certainly is not tough on crime.
I asked the chief constable to tell me why he believes that he has achieved such a substantial fall in crime in Staffordshire.

Mr. Mike O'Brien: Will the hon. and learned Gentleman give way?

Sir Ivan Lawrence: No, I must proceed—other hon. Members want to speak in this very short debate.
The chief constable said that the law and order situation in Staffordshire had improved for three reasons. First, he referred to the impact of legislation. He said:
I particularly have in mind the Criminal Justice Act 1991 and the Criminal Justice and Public Order Act 1994".

Mrs. Barbara Roche: Will the hon. and learned Gentleman give way?

Sir Ivan Lawrence: No, I adopt a completely sexless approach to dealing with interventions.
The chief constable continued:
The numerous changes in evidential and procedural matters either already have had, or will have, a significant impact on evidence gathering and the more effective prosecution of offenders. The alteration of the law relating to bail was particularly welcome as a means of preventing persistent offenders from continuing to commit crime whilst awaiting trial".
The Labour party opposed many—although not all—of those measures. The Labour-controlled East Staffordshire borough council is undoubtedly a strong supporter of Opposition law and order policies, and it must have felt that the Government were being both ungenerous and unhelpful in stimulating the police to the kind of achievements that they have realised in Staffordshire.
The chief constable's second point concerned
The impact of crime prevention measures
on the reduction of crime in Staffordshire. He wrote:
It seems clear that recent crime prevention measures, both at central and local level, have played a significant part in the reduction in levels of crime—particularly in the areas of house burglary and car crime.
He also mentioned CCTV.
Thirdly, the chief constable dealt with
The impact of improved tactics by the police".
The Government have gone out of their way to encourage the police to look at the way in which they practise policing and to take best practice from those forces that have been most successful in activities such as targeting known offenders.
The success in Staffordshire has been outstanding. The chief constable concluded:
Looking to the future, there is strong support for proposals, such as the imposition of limitations on disclosure to the defence, which it is understood are under consideration…In addition, there is strong support for proposals to improve the treatment of victims and witnesses within the criminal justice system…In the round, I think that many positive steps have been taken in recent times to tackle the problem of crime.
The hon. Member for Cardiff, South and Penarth (Mr. Michael) said that it is a pity that we cannot all work together to reduce crime. Here is his invitation.

Mr. Michael: Will the hon. and learned Gentleman give way?

Sir Ivan Lawrence: No.
Let us see whether the new, tough measures that the Government are about to introduce to deal with the most serious criminals have the support of the Labour party and its spokesman.

Mr. A. J. Beith: The police grant settlement is certainly not as difficult to live with as the local government settlement that we shall debate—and no doubt vote on—tomorrow, but it raises several issues that should rouse the Government from the dangers of complacency.
The principal complaint is that, although the settlement looks good in the context of this year's public sector settlements, it does not look so good when it is compared with the needs in the police service. The increase amounts to £235 million in police total standard spending. The estimated increase in pension costs this year is £74 million and estimated pay and prices increases amount to £179 million. The shortfall is even larger when the £20 million that is intended to pay for extra officers is taken out of the calculation and one looks simply at what police authorities have to continue and develop their work.
The settlement cannot make up for the cuts in last year's budget. It does not replace the officers that were lost last year, such as the 34 officers in Dorset, or the "million miles" of police patrols that the authority calculated had been lost as a result of cuts.
The Prime Minister promised 5,000 extra police officers at the last Conservative party conference, but questions remain unanswered and there is unease within the police service. It reminds me of the Conservative 1992 manifesto pledge that stated:
We are continuing to increase Police numbers. There will be 1,000 extra officers this year.
There were not. Although the number initially increased by 771, there have since been cuts of more than 1,300. The Prime Minister's latest promise must be called into question by the fact that a previous commitment was so clearly broken.
Some areas have been hit harder than others. Merseyside lost 151 officers, the Metropolitan police lost 409 officers and Avon and Somerset lost 82 officers. Those figures demonstrate that there is not much reality behind the Government's tough talk about law and order.
This year's pre-election settlement allows for 1,000 additional officers rather than the 3,000 that chief constables have been seeking for several years. That is what is on the table. The rest are phantom policemen for whom no resources are guaranteed.
The Association of Chief Police Officers questioned the Government's estimated cost of additional officers. It took the view that the figures failed to take into account the full costs involved, particularly the additional infrastructure and pension costs. The Committee of Local Police Authorities pointed out that the average annual cost of a police officer is more than double the £20,000 that is implicit in the Government's figures, and applies to all ranks of police officer. North Yorkshire has been allocated £276,000, which will not even pay for 24 constables at probationer rates when all the on-costs have been taken into account.
There are further concerns about the on-going funding of extra officers. Costs will rise as officers progress through their training and career, and there is concern that


the necessary money will not be available for that additional need. There is real uncertainty about what will happen after the three-year package—if it runs for three years—comes to an end. What will the funding be? Note will have been taken of the Minister's strenuous response to the remarks of the hon. Member for Cardiff, South and Penarth (Mr. Michael). We shall seek to hold him to his commitment for as long as he is the Minister who can be held to it.
There have been considerable cuts this year in capital allocations. The Committee of Local Police Authorities makes the interesting comment that it has noticed an almost exact match between reductions in capital funding and the supposedly additional £20 million for extra police officers.
The impact of the reductions on authorities will be notable. In various areas, capital programmes that are of some importance will be delayed. In Hampshire, there has been a cut of £1 million in the capital budget. It is expecting, in three years' time, a £2 million funding gap in its capital programme, including expenditure on buildings, computers and equipment. There are serious implications. In a number of police authorities, the move to install encrypted radios has had to be slowed down because the money is not available. That is extremely important now that the means of breaking into police communications systems are so readily and cheaply available to criminals. It gives criminals an advantage and reduces police effectiveness.
Capital allocation cuts were described by the Association of Chief Police Officers as robbing Peter to pay Paul. One chairman of a police authority commented after the Government had cut its capital allocation and increased its revenue budget:
We could have done that for ourselves.
There is some confusion about the private finance initiative. The Home Office says that PFI can be used to replace existing capital items, but the Department of the Environment says that it cannot. Clarification would be welcome. How are the police expected to plan their capital programmes when the Government move the goalposts so often?
The problem of pensions is yet to be resolved. There has been some provision within the funding mechanism, which the Minister described, but the real problem remains. It is more to do with the total funding that is provided for pensions. Cutting the cake differently is of only limited value. There needs to be a long-term solution to the problem, and the consultation process that is now taking place must lead to a solution, and to action on it.
The Government's plan for the future involves massive spending on a hugely increased prison population. Our vision is of preventing the crimes that would have put and kept offenders in prison by having enough police officers in the community who are properly equipped, and by tackling the root causes of crime.

Mr. John Greenway: I am rather flattered that the hon. Member for Cardiff, South and Penarth (Mr. Michael) should remember so vividly the discussion that took place during last year's debate on these issues. I had not expected that. However, I shall draw the attention of the House to the accuracy of what I said on that occasion. In effect, my comment was a two-edged sword.
Without question, the provisions of the Police and Magistrates' Courts Act 1994 give chief constables far greater discretion about how to use their resources. Like my hon. and learned Friend the Member for Burton (Sir I. Lawrence), I have discussed with David Burke, the chief constable of the force in the area that I represent—North Yorkshire—how the force is managing to exist under the new policy, which we were told when considering the Police and Magistrates' Courts Bill in Committee would be an unmitigated disaster for the police, resulting in huge cuts in police numbers and the police budget. That has not happened.
Having spoken to the chief constable, I find—I shall not suggest that all is rosy, because it is not—that now there is greater discretion when it comes to spending money, and more cash has been found as a result of efficiency. That means that the force will be able to employ more civilians and put more officers back on the beat.
It will also be possible to recruit more officers. I am reasonably optimistic—I wish that I was as informed about the exact figures as I was when I was the vice-chairman of the police authority—that we shall have about 40 extra officers in North Yorkshire in the year ahead as a result of the grant settlement that we are discussing and the greater flexibility that will be given to police authorities and chief constables as a result of the 1994 Act and the changes in the structure of police funding overall.
It is worth remembering not that North Yorkshire county council has had severe problems balancing its budget—I am on record as having said that—but that, in the final year in which it was responsible for setting the police budget, the budget that it set was £2 million less than the standard spending assessment recommended by the Home Office. That has been put right as a consequence of the new legislation.
I agree entirely with the right hon. Member for Berwick-upon-Tweed (Mr. Beith) —we desire a long-term solution to the funding of police pensions. Even so, the change in the formula for police pensions in the year ahead is very welcome. North Yorkshire suffered under the cosh of huge police pension costs that were totally disproportionate to what was in the previous formula. I am told that, now the formula has changed, it is neutral.
Oddly enough, if we had left the formula alone, we would have received the same amount of money, but that is life and I am sure that some police force somewhere is benefiting. It is important that what a police force has to pay in police pensions—lump sums for retiring officers, especially those of senior rank, which can be tidy sums—is more reasonably reflected in the formula.
We still need a much longer-term solution to the problem. It cannot be right that some 12 per cent. of police revenue budgets is spent not on officers who are actively in service but on officers who have hung up their truncheons, whistles and radios and gone to a pasture which, perhaps, is more profitable. It was a long time ago that I did that. As the House knows, my eldest son who, I hope, will be married later this year—[HON. MEMBERS: "Hear, hear."] —is keeping up the tradition of the Greenway involvement in the police service, and he enjoys his career very much.
I wish to make two important points. First, the Government rightly claim some of the credit for the fact that, throughout the country, crime is falling, but as my


hon. Friend the Minister knows—I have said this before in the House—the situation in rural areas is less attractive, not least because rural crime is growing. More rural properties are being targeted by criminals from the major cities. It is clear that local police resources are not adequate to deal with the problem.
Secondly, there is a growth in what I call crimes of rural terrorism, such as lampers—people who come on to property in four-wheel drive vehicles, causing mayhem, shooting and killing wildlife with total abandon and disregard for morality. Police resources are not adequate to deal with that problem.
Although I welcome the change in the formula, which has given greater weight to the needs of rural areas, it is not enough. We need to go further. I hope that my hon. Friend will take this on board. He represents a constituency that is much like mine. He knows of the problems that I have mentioned and which are a great worry to rural communities that do not have regular patrols of officers such as we see in urban areas.
I hope that, when we discuss the police grant settlement in a year's time in this Parliament, as this is not the pre-election police grant settlement that the right hon. Member for Berwick-upon-Tweed suggested—there will be another one; I am convinced of that—perhaps it will be even better and will bring in the second stage of the extra 5,000 officers.
I want to return to something that I suggested on Second Reading of the Police and Magistrates' Courts Bill. The new structure created a mechanism whereby the public could pay more for their police if they wanted to. We should compare what people are spending on insurance premiums, burglar alarms and other security arrangements with what an extra £10 or £20 per annum on the police precept per house would provide by way of additional officers. I rather think that the latter might prove more attractive and sensible.
The right hon. Member for Berwick-upon-Tweed mentioned North Yorkshire, which has a population of 726,000 and, I suspect, some 400,000 council tax paying households. The sum of £10 per property would produce £4 million more for the police. Let us split the difference between the figures suggested by the right hon. Gentleman: let us say not £20,000 or £40,000, but £30,000. We are talking about well in excess of 100 more officers in North Yorkshire for an extra £10 per dwelling on the police precept. I believe that, if that stark choice were put to the voters as clearly as I have put it here, they would opt to pay the £10 and have more police officers.
It may well be possible to deal with the matter through a parish or town council precept, but I must make one crucial point. There is no doubt that, in rural areas, supporters of the party that my hon. Friend the Minister and I represent—although they see that we are doing considerably more to increase police manpower and deal with the tide of crime—would like us to go further. Rural communities in particular want more police officers, and we must find further mechanisms to deliver them. I do not believe that, without them, we shall return to the crime levels that once existed in our idyllic countryside.

Mr. Bill Olner: Before I comment on the figures, let me pay tribute to the chief constable, all his police officers and the police committee in Warwickshire. I refer not only to the implications of the grant for the coming year, but to the preceding 12 months. The police authority and its officers have put up with a budget £6 million lower than it should have been because of the new formula.
I welcome the fact that the chief constable and the police committee have more freedom to examine their budgets and decide where they want their money to be spent, but the Minister will doubtless recall visits by the police committee and the chief constable—not this year, but last year—when the £6 million shortfall was discussed. I suspect that the Treasury and the Home Office had made their calculations, and Warwickshire police force did not expect the Minister to make too many changes last year to the figures that he had already announced; what they did expect was that the Minister would give serious consideration to the logical representations made to him by the police authority and its chief constable, and would remedy a number of the difficulties in this year's grant.
We had a very good meeting with the Minister some months ago. He said, "We are looking after you very well in Warwickshire." I did not accept that, but the Minister made a cogent argument and said that the Government were looking after Warwickshire well. In response to an intervention by my hon. Friend the Member for North Warwickshire (Mr. O'Brien), he said that Warwickshire's grant had been increased by 3.5 per cent. and that, with wage levels forming the majority of the constabulary's costs, Warwickshire should be able to look favourably towards expanding its services.
It was only during this debate that I learnt that colleagues were complaining that North Wales had had only a 5.1 per cent. increase, that Buckinghamshire had had only a 4.9 per cent. increase, that Derbyshire had had only a 4 per cent. increase and that Staffordshire had had only a 7.5 per cent. increase. In this year's grant settlement, Warwickshire has had an increase only of 3.5 per cent, but even a 7 per cent. increase would not have matched the £6 million shortfall that Warwickshire constabulary faces in 1995–96.
Warwickshire constabulary is losing 61 personnel. That does not square with the Prime Minister's much-vaunted announcement of 5,000 additional police officers. There may be extra officers in some police authorities that have had these marvellous increases, but not in Warwickshire. As my hon. Friend the Member for North Warwickshire said, the public, the media, the chief constable, the police authority and, more important, police officers know that they have had a raw deal from this Government, not only on last year's settlement but on this year's too.
I remind the Minister that, in our discussions, he said that, when setting its budget, the police authority had to consider not only the money that it receives from the Home Office in the form of grant, but its income generation. I agreed with him—we must consider income generation. I do not know whether we will push every council tax payer into paying additional money to assist the police authority, but I know that Warwickshire police authority considered offering businesses a key holder scheme.
At the meeting a few weeks ago, the Minister said that Warwickshire was £500,000 down on its estimated income. It is that much down because businesses, especially those in my constituency of Nuneaton, will not accept a two-tier policing system. Business rate payers and council tax payers pay their taxes. They expect police authorities to be adequately funded by the Government and by other means. That £500,000 shortfall in revenue is due to businesses' massive objections to paying into the two-tier system that the Government are proposing or forcing the constabulary to introduce in Warwickshire.
I earnestly ask the Minister to reconsider closely his settlement figures for Warwickshire. Last year represented a bad deal, but this year represents only less of a bad deal than that one.

Mr. Peter Atkinson: I shall be brief, but I shall take the opportunity to congratulate the Minister of State, Home Office, my right hon. Friend the Member for Penrith and The Border (Mr. Maclean), on behalf of my constituents and of those who live in the area served by the Northumbria police force on what he has done for policing in north-east England. The change from the historic method of funding police forces to the needs-based formula resulted in an increase of £15 million in the police budget last year and a further budget increase of £10 million this year. That is a substantial sum for the Northumbria police force and will translate into at least 35 extra officers this year. I hope that John Stevens, the chief constable, understands what my hon. Friend the Member for Ryedale (Mr. Greenway) said about the need to put some of the extra resources into rural areas.

Mr. Beith: I hope that the hon. Gentleman will recognise that the chief constable has done precisely that and released officers for rural areas after a long period when there were far too few.

Mr. Atkinson: I agree that our present chief constable has shown a strong commitment to rural areas.
I can give my hon. Friend the Member for Ryedale some good news about crime in rural areas. In the Hexham division, the number of burglaries and car crimes has fallen and thefts from agricultural buildings and factories are down by nearly a third. That is very good news for the people of rural Northumberland, and I hope that the trend continues.
I fear that the hon. Member for Cardiff, South and Penarth (Mr. Michael) did not understand the point of the new arrangements for policing. We have given chief constables power to organise their own establishments. In Northumberland, that has resulted in a number of senior officers and part of the hierarchical chain of command being removed from the service. As a consequence, some officers have retired early, so numbers have fallen. At the same time, however, the chief constable is recruiting new officers, so there are bound to be fluctuations in the number of officers in the force at any one time.
In Northumbria, there is a steady upward swing in numbers, which will mean an extra 140 officers in the next three years.

Mr. Michael: The Northumbria force has grown in number but the overall picture has been one of decreases

between 1992 and September 1995. I understand the point, but the trouble is that in many areas there has been a drop; perhaps the hon. Gentleman does not appreciate the overall picture.

Mr. Atkinson: I make no pretence of doing so, but I was trying to explain the method whereby police numbers will sometimes go down but then go up, depending on the way in which a chief constable decides to organise his force structure.
The deal for the people in the Northumbria police area has meant an 18 per cent. drop in crime since its peak in 1991 and a further 5 per cent. drop this year. We are getting a very good deal from our police force and we are also encouraged because arrests and the detection rate are up substantially.
The overall detection rate in Northumbria is the highest of any force in England and Wales. John Stevens, the chief constable, and the men and women of the Northumbria force deserve to be congratulated. I think that their final plea would be that a few more of the people whom they arrest and charge be convicted by the courts.

Mr. Mike O'Brien: The House will know that for the past two years I have had the honour to be Labour's parliamentary adviser to the Police Federation. I shall hold that post for only another two days, at which time I shall hand over the position to my hon. Friend the Member for Islwyn (Mr. Touhig). I am sure that he will be successful and even more popular than I have been.
In Warwickshire, crime in general has trebled since 1979 and the number of burglaries and car crimes has quadrupled. However, in the past couple of years crime has started to decrease as a result of police work and, particularly, the introduction of the new community beat officer scheme, Operation Claw, which targeted burglars. It has also decreased as a result of the massive public support that was so apparent in the recent report by HM inspectorate of constabulary on Warwickshire police force.
I am angry that our force, which has been so successful in fighting crime, should be penalised by the Home Office's failure to fund it properly. The chief constable and the police authority have said that the force has been underfunded to the tune of £6 million. According to the chief constable, in this financial year 61 posts have been lost from the previous establishment figure. The previous establishment was 1,045 but by November it had fallen to 984. The chief constable anticipates that it will have fallen to 945 by April 1997—a loss of 97 officers. That is not all due to Operation Sapphire—the Minister will know what I mean by that—which involved only 22 officers. Our constabulary has experienced a significant reduction in the number of officers. The Home Office is undermining the fight against crime in our county.
There have also been increased costs to my constituents. Many of them are very angry at the constabulary's new key holder policy, whereby people have to pay £50 plus VAT for something that previously was free of charge. They understand that the constabulary is under great pressure to introduce such policies, but they are angry that it is being forced to do so by the Home Office.
Warwickshire has been hit twice—first, by the Government's overall settlement for police, which is very tight, and, secondly, by the formula. The force says in its report to the Home Office that it hopes to stabilise the reduction in service in the medium term, but that a further decline in uniformed officers in 1996–97 is inevitable unless there is a significant shift in the spending power available to the force.
Her Majesty's inspector of constabulary said in his report on Warwickshire in 1995:
The freeze on recruitment, elimination of overtime, depletion of staffing levels most acutely seen on public holidays, postponing IT developments, abandoning of much of the training programme and over-reliance on the Special Constabulary will have an effect, in the longer term, on core policing in Warwickshire, and thus, on the service to the public".
The Minister should be thoroughly ashamed of such a report, yet he obviously does not seem to appreciate its importance. He says that the Prime Minister's promise of thousands of extra police officers will be fulfilled. It is clearly not being fulfilled in Warwickshire. Force morale, as the police authority so graphically said, is in real danger.
I ask the Minister to consider whether it is necessary to review the funding formula. I think that it should be reviewed to take into account adjacent metropolitan populations. Warwickshire has the west midlands, Leicester and a number of large metropolitan authorities nearby. We have crime problems from those authorities, but they are not reflected in the funding formula. Warwickshire also has miles of motorway—it is probably the county with the most miles of motorway. They need patrolling, and that factor should be properly recognised in the funding formula.
The funding formula should also reflect previous years' major operations that had an overall long-term effect on the budget—the Coventry airport animal rights demonstrations, which were enormously expensive, the Wardell murder inquiry and the tragic Naomi Smith killing in my constituency. They have all been an enormous drain on the constabulary's reserves and that must be recognised when the funding formula is reviewed.
I also condemn the way in which the Home Office has failed properly to fund closed circuit television in our area. The Home Office said that it was making funds available. Nuneaton and Bedworth and North Warwickshire applied for that funding and were refused. From Home Office replies, my hon. Friend the Member for Hornsey and Wood Green (Mrs. Roche) has been able to show that of the funding available for CCTV more than 70 per cent. went to the very few Conservative authorities in the country. That is discrimination against Labour authorities such as Nuneaton and Bedworth and North Warwickshire. Thankfully, the council can claim that, as a Labour authority, it has properly and fully funded the introduction of CCTV despite the handicap of the Government.
The results of the severe damage to funding in Warwickshire are clearly set out by Superintendent Gordon Wilson, who is in charge of Nuneaton police—the area of my hon. Friend the Member for Nuneaton (Mr. Olner). I am sure that Mr. Wilson spoke for all the officers in Warwickshire when he was quoted in the

Bedworth Telegraph on 8 December. I have already drawn the House's attention to the article, which suggested that the promise of 5,000 officers has resulted in the loss of 60 so far this year and the introduction of only nine. The Prime Minister's promise was pathetic.
Superintendent Wilson said:
The simple fact is that if you don't pay, you don't get the service. If the proper funding isn't forthcoming from the government, there is going to be a reduction in the quality of service to the public.
Our officers have responded admirably this year to a lack of funds, which has meant some working unpaid overtime to make sure the job gets done.
But they can't keep doing that. Something's got to give‖
It's a vicious circle: The more the officers are stretched at work, the more likely they are to get sick and need time off, leaving fewer officers even more stretched and even more stressed".
That is a senior police officer talking about the failure of the Government—a failure of which the Minister should be thoroughly ashamed.
Cuts in the police in Warwickshire, and the failure to back Nuneaton and Bedworth council's proposal to introduce closed circuit television in the town centre, mean that the Home Secretary is performing the job of the criminal; he is undermining the police. We have lost 60 officers in the county. The Home Secretary has ignored pleas to resource Warwickshire constabulary properly, and that is not all. When the Home Office announced that the funds were available for CCTV, our local councils did not obtain any, although Conservative councils did.
I am appalled at how badly the Home Secretary has failed people in Warwickshire. He has handicapped the police and the fight against crime. In Warwickshire, we know who the criminals' mate is—it is the Home Secretary, who is not funding the police in our county properly. When the general election comes, we shall remember the way in which the Minister of State and the Home Secretary undermined the fight against crime in Warwickshire.

Mr. Maclean: With the leave of the House, Madam Deputy Speaker. Seldom has the House been treated to such a ridiculous little speech as that made by the hon. Member for North Warwickshire (Mr. O'Brien). I shall treat his remarks about closed circuit television with the contempt that they deserve. Warwickshire did benefit from two Home Office funded CCTV schemes in the most recent round, and if it submits any good schemes in the next round those will be considered equally and fairly.

Mr. Mike O'Brien: rose—

Mr. Maclean: No, the hon. Gentleman talked and bored the House for long enough. With permission, Madam Deputy Speaker, I shall try to reply to the interesting points that were made in the debate.
Last year Warwickshire had a 5.3 per cent. increase in its funding. Note the weasel words of Opposition Members. They do not talk about the Government's "cutting" Warwickshire's funding, but you can bet your bottom dollar, Madam Deputy Speaker, that if the Government had cut the funding that word would have been used ad nauseam. Instead, Opposition Members talk about a "funding shortfall".
What does that mean? It means simply that, despite the fact that the Government are giving Warwickshire 5.3 per cent. more, it had a wish list costing even more than that, and it could not get all the funding that it wanted. I do not know of any police authority in the country that has ever received all the money that it would ideally like to have. I suggest that, with a 5.3 per cent. increase, and with police pay rising by only 3 per cent. last year, Warwickshire should have lived within its means. This year it will receive a 3.4 per cent. increase in funding.
The right hon. Member for Berwick-upon-Tweed (Mr. Beith) asked a good question about the funding of an officer. We have agreed with the Association of Chief Police Officers that the additional funding of £20 million next year will be sufficient to recruit 1,000 more constables.
ACPO agrees that the marginal cost of taking on a new officer is £19,738. I have already set out that figure in a detailed parliamentary answer, and it comprises salary of £16,117, national insurance contributions of £1,251, training costs of about £2,000 and uniform costs of £370. Those are the figures for a whole year, but 1,000 officers will not all be recruited on 1 April. They will be recruited throughout the year, so all the costs will not be incurred by the police force on day one. The provision that we are allocating is more generous than the figure of £19,738 would suggest.
We know that in the second year an officer's salary will be a bit higher, in the third year it will be even more and in the fourth year it will rise again. By the time he has done 25 years' service an officer is an expensive but a very worthwhile commodity. There are also the pension commitments. Of course we know that we must also consider the additional costs in future years.
My hon. and learned Friend the Member for Burton (Sir I. Lawrence) made an important point when he talked about the doom and gloom that came out of Staffordshire last year. But that was not true of Staffordshire alone. Let

us remember all the doom and gloom that we heard about this time last year. There was an ACPO forecast that 900 jobs would be lost in the forthcoming year.
The Independent was not to be outdone. If it can peddle a bigger lie, of course it will do so. It said that not 900 but 1,500 jobs would be lost. Then, Police Review—I give the magazine credit for caring about the facts, as The Independent did not seem to do—did a survey that concluded that there was likely be an increase of about 400 officers in the coming year with the money that the Government provided last year. But Police Review was too dashed conservative—we are heading for an increase of 900 constables in this financial year.

Mr. Olner: Will the Minister give way?

Mr. Maclean: No, I have only one minute left. It is not just a matter of those 900 extra constables, because there are extra civilians too. Opposition Members quibble about whether the Government will meet our target of getting 900 extra officers. When Labour left office, the police force was 8,500 bobbies under strength. With the Labour party, it is not a case of do as I do, but do as I say. I can tell the Opposition—

Mr. Michael: Will the Minister give way?

Mr. Maclean: No. Since we came to power, an additional 33,000 people have joined the police force—16,000 uniformed officers and 17,000 civilians. We are providing the manpower. We have done it before and we will do it again. We will honour our commitments.

It being one and a half hours after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14B (Proceedings under an Act or on European Community documents).

Question agreed to.

Resolved,
That the Police Grant Report (England and Wales) 1996–97 (House of Commons Paper No. 162), which was laid before this House on 29th January, be approved.

Film Industry (Scotland)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Conway.]

Ms Roseanna Cunningham: I am glad to have the opportunity to raise the matter of the Scottish film industry in the House. It would seem that this is the first occasion in a very long time on which the industry has been debated here in a Scottish context. That is surprising given the high profile accorded to the industry in the past year, even by the Secretary of State. I regret the absence of Scottish Labour Members, with the honourable exception of the Member for Linlithgow (Mr. Dalyell). I understand, however, that the Labour party's indifference to the industry as a whole extends even to its Front Benchers, and that is very unfortunate indeed.
In the past few years, there has been an enormous growth in interest in the film industry, not least because of the sudden upsurge in the number of Hollywood feature films to which we have been host. Naturally, we are pleased that we have apparently become flavour of the year, but there is concern that, when all the razzmatazz has died down and the Hollywood caravan has moved on, the indigenous industry will be no further forward.
Last year, the Secretary of State made much of his commitment to the industry; indeed, he even wore a kilt to the "Braveheart" premiere—something he might have regarded as a sacrifice. But so far, all we seem to have had is words. Even the long-awaited report from the Scottish Office has yet to materialise. Indeed, all that has happened in the meantime is that two more reports have been commissioned. I hope that tonight we will be given the date for the appearance of the Scottish Office report at least.
I hope that the opportunity will be taken tonight to make a concrete commitment to the industry. That is vital if we are to build a sustainable film industry in Scotland and move away from the boom and bust scenario that seems to be our lot at present. Future success can be ours in Scotland only if we can ensure a minimum sustainable level of production at all times.
It is fortunate that we have an existing infrastructure on which to base expansion, an advantage that the Irish did not have before they set their minds to building up their own film industry. They are, however, now rapidly developing one. Indeed in Scotland, Ireland is viewed with a certain rueful admiration. Ireland's achievements have been considerable, and have been brought about by a combination of Government intervention in the form of tax breaks, meaningful grants to the industry and the creation of a film-friendly atmosphere. Taken together, these have resulted in an irresistible pull on overseas productions. That has sometimes resulted in a relocation from Scotland to Ireland, a fact that did not escape the public's attention, particularly in relation to "Braveheart".
The Minister may not be aware of some of the invidious comparisons that can be made between Scotland and Ireland. For example, the Scottish Film Production Fund receives a Scottish Office grant of £190,000, which, in effect, has been frozen for three years, whereas its Irish equivalent receives 3 million Irish punts. That is the difference between 0.038p per head of population in

Scotland and £1 per head in Ireland and it does not reflect well on Scottish Office commitment. Will the Minister at least commit more funds to the SFPF?
Lottery money has certainly been made available, but it should not be seen as, and was never meant to be, a substitute for public funding. Sustainability will be dependent on a growth in both indigenous production and development over a long period. It should not be dependent on the vagaries of lottery grants.
We all need to remember that film is an industry like any other, with an enormous potential. It is easy to forget that, at a most basic level, it is about jobs, not just for the actors, directors and producers but for the carpenters and painters who build the sets, the folk who hire out the vehicles, the caterers who provide food, the dressmakers and make-up artists and the whole panoply of trades that are required in the making of any film, which is a very labour-intensive venture.
The industry is not just about jobs. Film is just one of the ways in which any society and culture find its own expression. That involves not just making films that are based on one's history or are about present-day experiences in a country, or features that are self-referential; it can also extend to the viewpoints through which other issues are seen and through which we view the rest of the world. It is important that we get the opportunity to do that as well.
Thus, it is important to get it right. Scotland needs a film policy implemented by Government and agreed by the principal bodies and players, which will do a number of things. The most important are: to prioritise commercial and employment issues, which does not appear to be being done; to attract investment, both internally and externally; to develop the skills base of the Scottish industry; to assist the commercial and non-commercial development of missing parts of the infrastructure; and to create a national organisation that can carry forward policy and strategy with the agreement and co-operation of the industry as a whole.
If I were to pick out the two first steps that are vital if the industry is to develop fully in Scotland and to fulfil the potential that is shown, the first would have to be the introduction of tax breaks for film production, modelled on the Irish section 35 scheme, which is highly admired and has become very successful in attracting the film industry to Ireland. It requires no new money from Government sources and I should have thought that that would be very attractive to the Government. Unfortunately, thus far, they do not seem to have been able to bring themselves to copy the Irish example—perhaps it is difficult to admit that a small and independent nation in Europe may have something to teach such a country as the United Kingdom.
Implementing those tax breaks would require no new money, merely a willingness to forgo income, which in any case might not otherwise come if the tax breaks were not there in the first place. Although tax breaks of themselves will not do the trick—in some cases, when films have moved to Ireland, they have merely made the film break even—they are nevertheless an important part of attracting external interest in a country.
Equally important, Scotland needs the development of a powerful new body to oversee public film policy and strategy. It will need to be properly set up and properly funded if it is to be successful. It is no use introducing


any such new body if it is not going to be resourced. I understand that the possibility of such an organisation is being canvassed under the working title of Scottish Screen. I expect to hear that the resourcing of any such new organisation would be sufficient to make it work in the long term. Any such organisation should be federal in structure, bringing together existing bodies such as the Scottish Film Council, which does good work, the Scottish Film Production Fund, Scottish Screen Locations and the Scottish Broadcasting and Film Training Trust.
In that structure, new bodies should be established, including one responsible for marketing and distribution. One big advantage of that would be the provision of a one-stop shop for those from furth of Scotland, who would find Scotland an even more attractive prospect than it is at present. It is in creating that attractive prospect that Ireland has been so successful. We would like Scotland to be able to follow that example.
One of the difficulties for interested parties from furth of Scotland is that they have to deal with a myriad of organisations. In some cases, they find it almost impossible to get help, especially as so few local authorities have dedicated film officers, or people in their economic development sections committed to attracting this important industry, which has enormous potential. That would allow the easy introduction to Scotland of a one-stop shop and make things much simpler.
We also need a properly functioning large sound stage on which big feature films could be made. Until we get one, we will have difficulty in dealing with bigger films. That means that they will end up going to places such as Shepperton or Pinewood, which would be a great loss to Scotland.
Unfortunately, successive UK Governments have regarded film as more a matter of infrastructure than of investment, and have oriented their support to a London-based industry that makes use of studio facilities. That has left Scotland exposed and without practical support. That is not good enough for such an important developing industry.
An independent Scottish Government would be certain to give the industry the priority it deserves and avoid the sort of nonsense that we currently face on the international front, where our industry may not be represented at all. For example, on the EU's Media 2 programme, UK representation comprises two people from the Department of National Heritage in London. There is no representation from the Scottish Office. I understand that, until recently, the Department of National Heritage somehow forgot to advise about the availability of a place for a representative from the industry in Scotland. Direct Scottish representation is essential for all such international bodies and is increasingly demanded by professionals, who recognise the need to insist on and maintain the distinctiveness of what is happening in Scotland.
It is the combination of practical measures and real encouragement that is vital in Scotland but currently absent. Sexy soundbites there have been in abundance, principally those uttered by the Secretary of State for Scotland, but the Minister will have to do much more than utter platitudes tonight if he expects people in the industry to have any confidence in Scottish Office commitment. He could make a start by answering some of the direct questions put to him and make some firm commitment

here and now that could be reported to the industry in Scotland as evidence of a real commitment rather than simply a commitment to tomorrow's headlines.

The Minister of State, Scottish Office (Lord James Douglas-Hamilton): I warmly congratulate the hon. Member for Perth and Kinross (Ms Cunningham) on securing this debate on an important and fascinating subject. She has addressed it in her customary forthright manner.
We provide substantial funds to the film industry. The Scottish Office allocated £1.5 million to the support of film in 1995–96. The bulk of funding goes to the Scottish Film Council, which is currently concentrating on Scotland's response to the EC's Media 2 programme and on encouraging each unitary authority and local enterprise company to adopt a development strategy for its moving image industry. We provide £190,000 a year to the Scottish Film Production Fund, and the Scottish Office funding is a catalyst for more funding to a total of almost £750,000.
With regard to a Scottish Studio sound stage, Hydra Associates will consider the case for a new studio, but it is widely acknowledged that a studio suitable for major Hollywood films would probably be unused for most of the year. To justify such an investment, it would be sensible to secure shared usage with television companies or build the studio as part of a larger entertainment complex. We are currently looking at the pros and cons of that.
The hon. Lady mentioned the Irish film industry, which has enjoyed a resurgence in recent years, partly as a result of tax incentives which are especially useful in attracting overseas productions to be filmed in Ireland. But the tax regime is rarely the principal consideration in deciding where to shoot a film. The suitability of the production facilities and the director's personal preference are also influential. The Government will certainly consider any lessons to be drawn from the Irish experience which can be applied to Scotland in the light of the consultants' report.
Before responding in detail to some of the other points that the hon. Lady has raised, I should like to put the Scottish position in the United Kingdom context. The number of films produced in the UK has risen from just 30 in 1989 to 81 last year, the highest figure for 20 years. Between 1990 and 1994, the UK was one of only four countries among the top 20 film-making nations to show an increase in the number of films produced. The number of films produced in the United States fell by 12 per cent. over that period.
Total investment in film production in the UK had increased from £253 million in 1990 to £421 million in 1995. As a result, the UK's share of total European investment in films rose from 18.4 per cent. in 1990 to 28.1 per cent. in 1994. In 1994, UK cinema admissions rose by some 120 million for the first time since 1978, eclipsing even 1993, which had the benefit of "Jurassic Park", the biggest grossing film in cinema history. The latest estimate for 1995 is a healthy 113.5 million.

Mr. Andrew Welsh: Will the Secretary of State give way?

Lord James Douglas-Hamilton: No, I should like to develop my reply to the hon. Lady.
The Scottish film industry has shared in those boom years. Having made only five or six films in the early 1990s, the number of Scottish productions soared to 12 in 1994 and reached an impressive nine last year. Films are financed in a variety of ways, but it is interesting to note that "Chasing the Deer", which starred Brian Blessed, was the first Scottish production to raise the bulk of its budget through public subscription. The film has recently gone into profit and investors should now see a return on their investment. "The Bruce", which will be released in March, has been financed in a similar way. The national lottery provides yet another new source of funding to build on the successes of recent years.
It is, therefore, fair to say that the film industry in Britain is in a buoyant state. With the dollar exchange rate in our favour, the UK's film studios are full. The recent purchase of Shepperton and Leavesden studios further demonstrates the confidence that exists in the industry.

Ms Roseanna Cunningham: Is the Minister seriously suggesting, with his examples of "Chasing the Deer" and "The Bruce", that we can build a sustainable film industry in Scotland on the same do-it-yourself basis with which we might build a garden shed?

Lord James Douglas-Hamilton: No. A variety of measures are necessary. If the hon. Lady will await my remarks, I shall develop the theme across a range of subjects.
As the hon. Lady said, the main activity continues to be in and around London, where the major television companies and film studios are located. The challenge facing the film industry in Scotland is to produce quality films with a distinctive Scottish feel, which are commercially successful, such as "Local Hero". The responsibility for achieving that rests ultimately with the writers, producers, directors and other skilled staff working in the industry in Scotland.
However, public funding supports some of the infrastructure for the industry. As I said in answer to a question about film production in Scotland from my hon. Friend the Member for Chingford (Mr. Duncan Smith), we are looking at a number of ways to strengthen those arrangements and the current film initiative announced by my right hon. Friend the Secretary of State last September is important so that we can ensure that the industry in Scotland breaks through to a new, more dynamic era.
The film initiative is intended to maintain the momentum of the current success story. After the release last year of "Braveheart" and "Rob Roy", the 1995 Scottish theme at the cinema will be reflected in a gentler and more contemporary vein in 1996 by "Loch Ness", which is to be released next week following its premiere at Inverness this Saturday.
Such films can give a significant impetus to marketing Scotland as a tourist location, and I am very pleased indeed that the Scottish tourist board has been very active building on the high film profile that Scotland now has. The impact is already apparent in tourism receipts.
For example, in 1995 twice as many people visited the Rob Roy and Trossachs visitor centre in Callender as in 1994. That, in turn, prompted several agencies to come

together to fund a £400,000 improvement programme at the centre to double the size of the facility. Admissions to the National Wallace monument at Stirling increased almost threefold in the four months after the release of "Braveheart". Passenger numbers on the SS Walter Scott on Loch Katrine are up 25 per cent. on last year—that had been Rob Roy country. We wish to build on those encouraging benefits to tourism.
To ensure that film-makers continue to come to Scotland, it is vital that all potential locations are marketed as effectively as possible. Accordingly, as a first priority for the film initiative, the Government have commissioned a CD-ROM, which will contain information about all Scotland's main screen locations. That will enable film producers throughout the world to have immediate access to visual and factual data about all the locations at the touch of a keyboard.

Mr. Alex Salmond: rose—

Lord James Douglas-Hamilton: I should like to develop my arguments further.
In support of that marketing initiative, we want to remove any unnecessary impediments to overseas films coming to Scotland. That means, if I may paraphrase the usual jargon, securing a one-stop shoot, which the hon. Member for Perth and Kinross mentioned. In practice, that entails applying the "customer first" approach on behalf of the many organisations and agencies with which film makers must co-operate in their production work. Time is of the essence when shooting on location, and effective co-ordination with local authorities and others is essential if that time is to be fully used.
Different considerations apply to Scottish-made films. There also, the picture is a great deal more promising than it has been for many years. "Shallow Grave" was a box office hit on both sides of the Atlantic. "Small Faces", shown to wide acclaim at last year's Edinburgh international film festival, will be released later this year in the United States and Europe. "Trainspotting", which will have its world premiere in Glasgow next month before going on general release, promises to be a third success for Scotland. All three films have relied, at least in part, on public sector support through the Scottish film production fund and the Glasgow film fund. All three are testimony to the fact that the present arrangements can help to bring about Scottish film productions that are both cultural and commercial successes.

Mr. Salmond: rose—

Mr. Welsh: rose—

Lord James Douglas-Hamilton: I should like to develop a few more points before I give way.
As more national lottery funds become available—to be dispersed by the Scottish Arts Council—the impact of public sector support for production is likely to be even more influential.
Those recent successes owe much to the judgment and determination of the board and staff of the Scottish film production fund.
The role that broadcasters can play in developing the film industry in Scotland must not be overlooked. BBC Scotland, through its "Tartan Shorts" scheme, in


conjunction with the Scottish film production fund, is helping to nurture talent. Indeed, the success of the Scots actor Peter Capaldi in winning an Oscar last year for his "Tartan Shorts" film, "Franz Kafka's It's a Wonderful Life" shows the high quality of that initiative.
Recent Scottish Film Council initiatives, including its First Reels and Movie Makers projects, coupled with training initiatives spearheaded by Scottish Broadcast and Film Training Ltd, are working towards the creation of a new generation—indeed, a renaissance—of talented Scottish directors, producers, technicians and writers. That is extremely welcome.

Mr. Salmond: I thank the Minister for giving way and I apologise for knocking him off his stride. At the beginning of his remarks, when he compared the Scottish situation with that of Ireland, he said that tax was not crucial to film location. However, the Government argue that tax is crucial in every other area of Government policy on inward investment for every other industry. Why does the Minister argue that the taxation position of this industry does not matter and is not crucial?

Lord James Douglas-Hamilton: There are a variety of reasons why that is so. In the case of one film—part of which was filmed in Ireland—I understand that the cost of transporting the crew wiped out much of the tax difference. I said very clearly to the hon. Lady earlier in the debate that we shall consider any lessons to be learnt from the Irish experience which can be applied to the Scottish situation in the light of the consultant's report. We shall fulfil that commitment, and I shall bear in mind the hon. Gentleman's remarks and his strength of feeling on that point.
Despite the relatively rosy picture overall, there is always scope for improvement. In order to examine ways in which the present infrastructure might be improved further, two studies have been commissioned from Hydra Associates as an important element of the fact-finding phase of the film initiative. The first wider study is examining the overall organisation of the film and television industry in Scotland and the opportunities which exist to develop and improve it. The second study focuses more specifically on the mechanisms for funding film productions and, in particular, how to secure more private sector investment. Both studies are now well under way and they should be completed next month.
It is obviously too early to know what will emerge from the studies by way of final recommendations. However, Hydra Associates has held two brainstorming sessions with representatives from the industry, drawn from both the UK and beyond. They have identified six key themes requiring further analysis and consideration: the need to develop and provide training; strengthening the institutional arrangements within Scotland; the importance of attracting new sources of finance; the dominance of London in the United Kingdom film and television industry; improving the marketing effort; and the availability of adequate production and post-production facilities in Scotland.
The final component of the film initiative, which addresses one of the themes identified by Hydra, is the policy and financial management review of the Scottish Film Council which was carried out by Scottish Office officials last year. The review considered how to obtain

maximum value for money from the central Government resources available for film in Scotland. The review will be published shortly and I will make certain that copies are made available in the Library.
Inevitably, there has been much speculation about the content and conclusions of the policy review. While I do not want to pre-empt its publication or Ministers' consideration of the review, I can say that it highlights the many developments which have taken place since the Scottish Film Council was established as an non-departmental public body in April 1990. It also draws attention to the contributions made by Scottish Screen Locations, Scottish Broadcast and Film Training Ltd. and by the Scottish Film Production Fund. Despite the progress made over the past five years, the review concludes that, in order to overcome a significant overlap in functions between the Film Council and the other three agencies, there might be merit in merging the bodies into a single new agency.
We will consider that and other recommendations contained in the review, alongside the two studies currently being undertaken by Hydra Associates. That will provide an opportunity to consider the future direction for the next five years in a strategic and a holistic way. We obviously need to be clear about our overall objectives so that they are reflected properly in any new structure to be created. We expect to be in a position to announce our conclusions later in the spring.
The hon. Lady seems to believe that the industry's salvation lies in yet more public funding. I do not think that that is necessarily the case. We must remember that, even beyond the increasing resources that will flow from the national lottery, film is an industry. Its practitioners in Scotland must be flexible, versatile and imaginative, and those qualities will flourish when opportunity knocks.
The Government carefully considered last year's Select Committee report on the film industry, which called for tax concessions. We were not persuaded that that should be a priority in last November's Budget. The tax rules for writing off film production expenses are already more generous than for industry as a whole.
Furthermore, in order to examine the availability of finance for film production in its widest sense, my right hon. Friend the Secretary of State for National Heritage has established a high-level advisory committee under the chairmanship of Sir Peter Middleton to look at obstacles to the industry's growth. We are hopeful that Sir Peter and his colleagues will produce practical and effective recommendations.
I should say how welcome it is to see the hon. and learned Member for Fife, North-East (Mr. Campbell) in his place as he is a trustee of the Sean Connery trust. Many young people have benefited from the substantial contribution that a distinguished Scot has made to the film industry.
We want to give whatever support we can to the Scottish film industry. We want many more successes, many more tourists coming to Scotland and many more films being made in Scotland. We shall work flat out to that purpose and I am grateful to the hon. Lady for having raised the subject today.

Question put and agreed to.

Adjourned accordingly at fifteen minutes past Twelve midnight.